Mad Money

Cramer blames Washington for the stock market's pessimism

Key Points
  • "Mad Money" host Jim Cramer says Washington gridlock is bringing down investors' moods about certain stocks.
  • Cramer makes the case for a few strong earnings reports that were marred by the GOP's failure to pass health care reform.
  • Although the market turns to FANG when lawmakers stall, Cramer argues for other names that can do just as well when Congress is at a standstill.
Cramer: Washington at fault for market's pessimism

The GOP's failure to pass health care reform has shaken the market, so much so that Jim Cramer made the case for cordoning off Wall Street from Main Street.

"I want to cordon off Cramerica and do it today. ... Today's breakdown of the GOP's most bedrock campaign promise, repealing and replacing Obamacare, has cast a pall over everything," the "Mad Money" host said. "I just think that Congress' inability to accomplish anything, anything at all, has started to poison the atmosphere on Wall Street, because it's made us look at the results of our great American companies with way too jaundiced an eye."

While Wall Street obsesses over the FANG stocks, Cramer's acronym for Facebook, Amazon, Netflix and Google, now Alphabet, for being the few plays immune to Washington's turmoil, strong earnings reports are overlooked or even met with disdain.

"That's why I want to sing the praises of a bunch of companies that have reported this earnings season, companies that would be getting a lot more attention and love right now if Washington wasn't making us feel so pessimistic, so cynical," the "Mad Money" host said.

Cramer started with the banks, which he believes represent value despite the action in stocks like JPMorgan, Citigroup, Bank of America and Goldman Sachs that suggests earnings were weak.

Take JPMorgan. Its earnings report surpassed estimates by far, but the stock sank in response. On the conference call, CEO Jamie Dimon blasted Washington's inefficiency, using an expletive.

"What can I say, I think Dimon hit the nail on the head," Cramer said. "However, I wish he'd used a different forum to talk about politics, because Dimon's screed forever linked JPMorgan's amazing quarter with the nonsense of Washington. Yet JPMorgan's results, like those of Citi and Bank of America, are splendid examples of how well banks can run without one ounce, one iota of help from our federal government."

Defense contractor Lockheed Martin also beat the Street's estimates with its earnings report, but its stock also dipped Tuesday after a small pop in early-hours trading on the news.

"This company's generating $6 billion in cash [and] returning scads of it to shareholders. But the bulk of this defense contractor's profit comes from, you guessed it, Washington, and who the heck wants to be chained to these do-nothing embarrassments?" Cramer wondered.

Johnson & Johnson's stock was also scorned after the Republican health care bill failed, which Cramer felt was wrong after the company delivered a stellar earnings report.

The pharmaceutical and consumer goods giant beat on the top and bottom lines and gave strong guidance for the year ahead despite Congress' mishaps, but pessimistic reports out of the nation's capital suppressed the stock's rightful run, Cramer said.

"Here's the problem, though: if you own stocks, by nature you need to be optimistic. You'd be hard-pressed to own any stocks if you thought our nation was a colossal joke," Cramer said. "The bottom line here: don't trust the muted reactions we're beginning to see to some of these amazing results from our fabulous American companies with their amazing management[s]. Don't say, 'This is a narrow market because only FANG is going higher.' Instead, say, 'Let me go back over these quarters without thinking about how embarrassing Washington has become.' When you stop viewing stocks through the prism of politics, you know what? You're going to find a lot of things that you like, a lot of things that you should be buying."

Watch the full segment: Cramer takes on the capital

Cramer blames Washington for the stock market's pessimism

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