Cramer Remix: Stocks are in a strange nirvana. Here's why

Jim Cramer sees a brand new phenomenon at work in the stock market.

On a day like Wednesday, investors simply just wanted to pay more for stocks than they did the day before. The phenomenon is called re-rating, where stocks are upgraded to a "buy" from a "hold" simply because of good news that is completely separate from the overall stock market.

In fact, in many ways the market is right back to where it was before the U.K. vote. Once again, stocks are taking their cue from the price of oil.

Oil once again bounced from the $46 level that it hit after the Brexit vote, and now it's back at $49. That is the level before the U.K. vote.

"That reflects some genuine strength in the economy and is very positive for stocks," Cramer said.

Even better, this time around the fear of a rate hike from the Federal Reserve is off the table because of the turmoil overseas. The combination of higher oil prices and less likelihood of higher interest rates has launched the U.S. market into what Cramer described as a "weird version of stock nirvana."

Oil refinery with fire,
John Guillemin | Bloomberg | Getty Images

With the world distracted by a Brexit this week, Cramer has watched China suddenly gain amazing strength.

As the world's second-largest economy, China matters a heck of a lot more to Cramer than the U.K., which is the fifth largest economy.

China's strength has manifested via a 2.7 percent rally in the Shanghai composite and multiple positive days for the Baltic Freight index. This suggested to Cramer that China is importing raw goods. The rally in oil and rebound in copper also indicated that China has increased demand.

"There is no denying that the global financial system is in worse shape ever since the U.K.'s Brexit vote … but the same apparently cannot be said for China," Cramer said.

The data all added up to China being up, not down for Cramer, as he speculated that this could be the reason why the blow of a Brexit seems to have softened.

Retail in the U.S., though, has not been as successful as China. Since peaking last year, Kohl's, Macy's, Nordstrom and Dillard's are all down more than 50 percent.

The only exceptions were the ones that were already in free fall for years, such as J.C. Penny and Sears.

"Things have gotten so bad for this cohort that we need to start asking ourselves which of them have what it takes to survive this ultra-hostile environment," Cramer said.

Cramer analyzed each company for its ability to withstand the popularity of Amazon, and the decline of the shopping mall.

"While I would stay away from all the department stores here, from a pure survivability perspective, Nordstrom is the most safe, followed by J.C. Penney, then Dillard's and Kohl's tied for fourth and the awful Sears Holdings coming in dead last," Cramer said.

At a moment when retail is finally starting to turn around, Cramer recommended that the stronger plays are worth a long trade, and those stuck in a bad stock could have a chance to sell it into strength soon.

Martin Richenhagen, CEO, AGCO, interviewed by CNBC's Jim Cramer
Scott Mlyn | CNBC
Martin Richenhagen, CEO, AGCO, interviewed by CNBC's Jim Cramer

As the world's No. 3 largest maker of agriculture equipment, Cramer has started to wonder if AGCO could be part of a turnaround in the agriculture space. The company reported a strong quarter in April, with a top and bottom line beat that included robust full-year guidance.

AGCO announced on Wednesday that it will purchase Cimbria Holdings for $340 million in an effort to bolster its seed and grain processing business. The consolidation was confirmation for Cramer that there could indeed be a turnaround occurring.

To learn more, he spoke with AGCO's chairman and CEO Martin Richenhagen, who commented on the cycle of the agriculture space.

"I think that we are close to bottoming out. Hopefully it will bottom out this year, and I'm slightly more optimistic for 2017. We will perform pretty well. I think we will deliver on what we promised … Brexit is a no-brainer for us," Richenhagen said.

Sonic Corporation was once regarded as one of the only fast-casual restaurant chains that could thrive in a McDonald's dominated industry. However, after reporting a strong quarter in March and peaking in April, the stock has fallen more than 24 percent.

Cramer pointed to the weakness stemming from a deceleration in same-store sales growth reported in earnings last week, down to 2 percent from 6.5 percent in the previous quarter. While Sonic reiterated full-year guidance, management acknowledged an industry-wide slowdown possibly because of unseasonably rainy weather in April and May.

Cramer spoke with Sonic's chairman and CEO Cliff Hudson, on Sonic's perspective of what happened.

"We are certainly aware and comfortable with initiatives that we have underway. What we are less certain about is what is happening with the consumer. Some say the consumer is going through an attitudinal shift — on a broad basis, I'm not just talking about the Sonic consumer — but on a broad basis in that late April into May time frame," Hudson said.

In the Lightning Round, Cramer gave his take on a few caller favorite stocks:

Spark Therapeutics: "They are an incredibly speculative stock. We happen to have a couple of biotechs that actually showed some very wild moves today. Some cut in half, and some doubling. I have to tell you, this company just did a secondary. That makes me uneasy."

General Electric: "If Jeff Immelt [CEO] goes with Nelson Peltz's plan — that's Trian, and Trian has made a lot of money — then he'll be buying back stock hand-over-fist, and you should too. It's one of the largest positions in my charitable trust. I think you should own GE."