Jim Cramer is seeing strong signals from stocks that Hillary Clinton is not only just pulling away from Donald Trump in the 2016 election polls, but that Democrats could be ready to sweep both houses of Congress.
This is a major reason why stocks haven't been performing as well as expected, he said.
"I think it is important to frame the stock market in the context of a potential Democratic landslide come election day," the "Mad Money" host said.
If both houses of Congress were to go Democratic, it could put the banks back in Washington's crosshairs, Cramer said. That means more regulation and multiple discussions on whether banks are too powerful.
And forget about mergers. Cramer expects to see the Justice Department's anti-trust division block anything that could create excessive concentration. That means the Bayer-Monsanto, Dow-DuPont or even the Walgreens-Rite Aid deals could be in jeopardy.
"The tepid action in the winners so far this earnings season simply does not indicate that the results are sub-par. It is a reflection of the fact that money managers are worried about a Democratic landslide come election day, so they are selling anything that the government could potentially squelch," Cramer said.
In one of the wildest merger stories that Cramer has ever seen, hackers broke into Colin Powell's email. He is a board member of Salesforce, and the results of the hack produced a file displaying potential takeover targets that Salesforce had considered.
"Given that we know Salesforce was in talks to buy Twitter … I'd say that is pretty bizarre. My guess is that Twitter's board must have changed its mind about being willing to put the company up for sale only after this list came out, and that is the reason it was omitted," Cramer said.
The most logical candidate for Salesforce is Pegasystems, Cramer said, but given that the document is from six months ago, he wondered if it had been looked at and passed on.
The airline sector roared higher on Wednesday on the heels of United Continental earnings. However, the truth is Cramer didn't actually hear anything positive from management when it reported.
There was one line that caught Cramer's attention on United's conference call, spoken by President Scott Kirby, former President of American Airlines. He said the company thinks the revenue environment has bottomed, and is starting to see recovery in all regions — with the possible exception of the Atlantic.
Kirby's comments were significant for the industry. When bad numbers are slightly better than the previous decline, and the stock stops going down, Cramer interprets it as a signal that investors are willing to pay up for the stock.
Analysts recognize this, too — which is why there are now more buy ratings than holds allocated to the stock.
"I suspect that United Continental will now be a 'go-to' name on any market-wide weakness, because portfolio managers who are hung up about sky-high valuations know that UAL is basically the antidote to owning expensive stocks that have had remarkable runs," Cramer said.
However, at its current levels, he isn't so sure that the stocks are worth owning anymore.
"Until we know more, I can't get too enthusiastic … That might sound very odd, because for more than a year I recommended the old RR Donnelley as a breakup play with a juicy dividend," he said.
While many biotech stocks have struggled this year, Cramer found one that has more than tripled this year alone. Corbus Pharmaceuticals is a small-cap development stage biotech with a lead drug, Resunab, which is a treatment for various chronic inflammatory and fibrotic diseases.
Investors are excited for the drug's potential, and have sent the stock soaring. The company was also granted orphan drug status by the EU on Tuesday. Cramer noted that this is a small and very speculative company that should only be bought with money that investors can afford to lose.
To learn more, he spoke with Corbus Pharmaceutical's CEO Yuval Cohen, who said the company's main focus is on a small family diseases that are rare, or actually orphan diseases.
"They only have tens of thousands of patients in the United States, but they are diseases where the effect on the patient can be devastating … Sadly these are diseases that are either life threatening or actually terminal," Cohen said.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
Thermo Fisher Scientific: "In our charitable trust, we made a sale as we described in our actionalertsplus.com bulletin, that the stock had run so much, we were concerned that you would get a chance to buy it lower. It has come down, but not low enough to be able to pull the trigger."
AMN Healthcare Services: "I want you to stick with it. If not, buy more. Susan Salka [CEO] is welcome on the show anytime. I like this story very much. I think it's a good one."