CNBC's Jim Cramer suggests that investors don't underestimate the importance of a U.S.-China trade deal as negotiations pick back up in Washington, D.C. next week.
President Donald Trump has signaled that he may hold off of hiking tariffs on Chinese imports as time inches closer to a March 1 agreement deadline. Stocks rallied, including many in the tech and retail sectors, Friday and the Dow Jones Industrial Average added more than 443 points. It's a hint that economies around the world could return to sustainable global growth, Cramer said.
Wall Street watchers may be skeptical if a trade agreement between the world's largest economies would actually stop earnings from shrinking, but Cramer said there are a number of signs that a deal could give a boost to companies with exposure to China.
"If we get a deal ... I think the stocks of many international companies, or companies in other words that are based here that sell internationally, can rally because at this point the earnings estimates are too low," he said. "A trade deal translates into higher earnings and higher earnings almost always lead to higher stock prices."
With that in mind, the "Mad Money" host told viewers what stocks he'll be watching after the Presidents' Day holiday Monday: