Runs from pharmaceutical stocks like Merck and Pfizer have the market pointing to a recession, but CNBC's Jim Cramer thinks it's the result of investors rotating to a cheaper group of stocks.
A jump in a pharma stocks means that the FDA has approved a significant drug, but that's not true this time around, the Mad Money host said. Usually, that means a recession on the way, because investors tend to buy staples like major pharmaceuticals when they're worried about global trade slowing down.
But Cramer disagrees, saying that the stocks are up because of a correlation with ten-year Treasury bonds. Furthermore, he argues that these stocks don't correlate with the economy.
"There's too much evidence of strength — job growth, small business confidence, car loadings — and if you overthink it and interpret these moves a sign of a real slowdown, I believe you will cost yourself a lot of money that you should be making if you weren't betting that the economy's about to roll over," Cramer said.