Cramer tracks 4 growing market discrepancies: Rates, Trump, cryptocurrencies and stocks

Key Points
  • "Mad Money" host Jim Cramer tapped into four conflicting arguments in the stock market that are dominating the tape.
  • From Treasury yields to President Trump, contradictory opinions are being floated — and taken at face value — throughout the market, Cramer said.
  • But the bears are slowly realizing that the market is stronger than they think, Cramer argued.
Cramer on rates, Trump, cryptocurrencies & stocks

To CNBC's Jim Cramer, the story of this stock market seems to be all about "cognitive dissonance."

"There's just so many examples of investors holding two contradictory opinions at the same time and it has a tendency to color the tape," the "Mad Money" host said on Thursday, pointing to four distinct examples.

1. Rates

The informal start to earnings season was led by the big banks, almost all of which issued their reports this week. Cramer noticed that in their conference calls, top executives touted how much money they can make when both short- and long-term interest rates are climbing.

"Makes sense — when rates go up, lending becomes more profitable for the banks," Cramer said. "But just as we finally start to get some inflection in the yield curve, suddenly all kinds of commentators are bemoaning the potential consequences of higher long-term rates on the U.S. economy. How the heck is that possible?"

Just a few months ago, many of the same commentators were raising concerns about a flattening yield curve, the "Mad Money" host said. Now, they're insisting it's not flat enough.

"I'd say these so-called experts need to read the conference calls, but I suspect it wouldn't matter. Why the heck would you ever let the facts get in the way of a good negative story?" he quipped.

2. Trump

President Donald Trump has easily become one of the country's, if not the world's, most controversial figures.

There are few places where that plays out more starkly than in the market. Trump supporters credit the president for a strong economy and surging stock market; those who dislike him refuse to acknowledge the tangible effects of tax cuts and deregulation.

"That's a bad way to approach investing," Cramer said. "You need to put aside your personal opinions. Even if you loathe Trump, even if you think he's an idiot, even if you view trickle-down economics as a toxic ideology, listen up: you have to be able to admit that his agenda has been very good for business and for your stocks."

3. Cryptocurrencies

Investors are head over heels for cryptocurrencies like bitcoin even though many of them are undergoing major, volatile swings in price, the "Mad Money" host said.

At the same time, they're ignoring stabler equities like stocks.

"If the cryptos keep crashing, that speculative money will have to go somewhere," Cramer said. "I bet it will flood into stocks, mostly micro- and mini-capitalization companies that have about as much going for them as bitcoin. It will give those tiny stocks a huge boost, but [it's] not happening yet."

4. Stocks

Finally, Cramer sees dissonance in the overall market when it comes to individual stocks.

A lack of initial public offerings (IPOs) and secondary offerings combined with increased share buybacks is reducing the amount of stock on the market, but exchange-traded funds continue to buy big swaths of stock all the same, he said.

That means that as stock-pickers seek to buy individual stocks, buyers from ETFs, index funds, hedge funds and other deep-pocketed institutions continually push prices higher, thus lowering the value for companies that don't consistently buy back their shares.

Final thoughts

"Put it all together and you can understand why this market has faced so much skepticism, pessimism, whatever you want to call it, cynicism, even as it keeps powering higher," the "Mad Money" host said. "Gradually, the bears will be forced to acknowledge reality, and when they do, that's how you get another leg of upside."

WATCH: Cramer finds 'cognitive dissonance' in the market

Cramer tracks 4 growing market discrepancies: Rates, Trump, cryptocurrencies and stocks

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