CNBC's Jim Cramer said Tuesday that the strength of the stock market winners is obscuring harsh economic realities that exist across a U.S. economy that's been ravaged by the coronavirus pandemic.
And with Covid-19 cases rising in states across the U.S. and the prospects of additional stimulus from Washington looking dim, the "Mad Money" host said the "'A Tale of Two Cities' economy" is rearing its head once again.
"The visible stories are almost all positive. The negative stories are mostly hidden, at least when it comes to the stock market," Cramer said. "The losers are being crushed by the virus. The winners either benefit from it or can survive it to come out the other side with fewer rivals."
Cramer's comments came after the Dow Jones Industrial Average closed higher by 140 points, or 0.5%, rebounding following a 509-point decline Monday. The S&P 500 and Nasdaq Composite gained 1.1% and 1.7%, respectively, the first gains for those indexes in five days.
Amazon led the way for the tech-heavy Nasdaq, rising more than 5%. The e-commerce titan remains down almost 10% in September, but it has now pieced together two straight days of gains. Cramer said the move back into Amazon, which has been a market leader during the pandemic, is part of rotation into stocks that thrive in a stay-at-home world.
But that success, he cautioned, has its downside for the broader U.S. economy. "Anything they win, any market share they take, does often come at the expense of the brick-and-mortar competition," he said.
"When you see Amazon flying ... I want you to consider it to be creative destruction, the destruction of all the stores that lack convenience, that are stunted by social distancing and that will ultimately fold if they don't get some help from Washington," Cramer said.
Cramer said the "contorted economy" is also visible across other areas of the retail landscape. Clothing company Ralph Lauren, for example, closed up more than 5% Tuesday, but it wasn't an upside move driven by better-than-expected sales or earnings, he said.
"No, they fired 3,700 people, or 15% of their workforce, as the company shifts from a more mall-based company to a more internet-based strategy. Good news for the market, but real bad news if you work for a living," Cramer said.
In addition to retail, Cramer said the restaurant industry also exemplifies the duality of the economy. He pointed to shares of Chipotle, which rallied 2.3% on Tuesday to $1,234.58 apiece. The fast-casual chain notched an all-time $1,384.46 on Sept. 2, but then moved to the downside most of the month. It has a two-day win streak going now.
"[Chipotle] has a fantastic strategy for takeout and delivery. Forget indoor dining, they're making roughly the same amount of money as they did pre-pandemic, thanks to their Chipotlanes," he said. "They're getting big breaks on rent because landlords desperately need to keep tenants who can actually pay."
But the struggling side of the restaurant business is found in the bankruptcy filing of Sizzler, a 62-year-old steakhouse chain, Cramer said.
"Sure, there are some smaller restaurants that can still compete, but you just wait until it gets cold and windy outside. With no outdoor dining and heavily restricted indoor dining, most of this industry will be sadly out of luck," said Cramer, himself a small restaurant owner.
On Tuesday, there also was strength in the market in software companies that benefit from a longer period of remote work, such as Docusign and Zoom Video, according to Cramer. The stocks gained 3.47% and 5.15%, respectively.
"This is the new normal until we get a vaccine. Every time we try to reopen, the virus comes right back," Cramer said, meaning there will continue to be considerable pain across the U.S. economy.
But, he added, "you can't see it from the stock market, which has more winners than losers on a day like today. That's because the losers are too small to be public, and that's who the government needs to be ready to protect as it gets cold and the weak, by no fault of their own, can't make it through to the promised vaccine land."
Disclosure: Cramer's charitable trust owns shares of Amazon.