Cramer: 'Better-than-feared' Apple earnings may be enough to pop the stock and overall market

Key Points
  • CNBC's Jim Cramer says Apple shares could very well rally on "better-than-feared" earnings.
  • Apple is set to report fiscal third-quarter earnings after the bell Tuesday.
  • "People really feared this earnings period," Cramer says. "It turns out that that fear was not justified."
Cramer: Apple will rally on better-than-feared earnings

Apple shares could very well rally on "better-than-feared" earnings, even if quarterly numbers are not that great, according to CNBC's Jim Cramer

"I know it's a big week for earnings, but I'm really focused on Apple," Cramer said Monday on "Squawk Box." "There's a lot of thought that Apple, people are so bearish on it, that it can rally on a subpar number."

Analyst estimates call for adjusted Apple earnings of $2.10 per share for its fiscal third quarter. That would be a 10% drop from the year-ago period. In April, Apple reported fiscal second-quarter earnings of $2.46 per share, beating expectations by 10 cents, but roughly 10% lower than Q2 2018.

If Apple were to eke out a quarterly beat when it reports after the bell Tuesday, that may be enough to also continue an uptrend trend in the overall stock market, Cramer added.

"That's been the theme: When you have this better than feared, the stocks go higher," he said. "It's all about better than feared. People really feared this earnings period." He added, "It turns out that that fear was not justified."

Shares of Apple were higher Monday, trading around $210 each. That's about 10% below its October all-time high. The stock is up about 33% in 2019, outpacing this year's 20% gain for the S&P 500.

With stocks at or near record highs, investors have become increasingly concerned about the impact of the ongoing U.S.-China trade war and global economic slowdown as well as persistently low inflation.

At the end of last month, President Donald Trump and Chinese President Xi Jinping agreed to a tariff truce and to restart talks aimed at resolving their market access disputes. Officials from the U.S. and China are set to meet in-person in Shanghai this week.

Twelve days before the Trump-Xi meeting at the G-20 summit in Japan, Apple had warned, in a letter dated June 17, that tariffs on its products would reduce its contribution to the economy. It also requested a waiver.

However, Trump announced Friday that his administration would not grant relief for Apple parts made in China.