Cramer: Do Pros Know Something About Europe You Don’t?

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Jim Cramer is starting to wonder if events in Europe are about to have a major impact on the US stock market.

Earlier in the week during conversations on Mad Money, CEO Sandy Cutler from Eaton and CEO Chuck Bunch from PPG both indicated that headwinds from Europe may not grow worse than they already are.

"Then, on Tuesday we got numbers from two of Europe's biggest banks, Deutsche Bankand UBS, and I found them to be spectacular," said Cramer.

The Mad Money host thinks the proprietary information he uncovered during the interviews combined with results from Deutsche Bank and UBS may be prescient.

Cramer's conclusion - "I think it's possible Europe may be bottoming out," he said.

The European Central Bank in Frankfurt, Germany
Getty Images
The European Central Bank in Frankfurt, Germany

Now make no mistake, Cramer is not saying Europe is getting better broadly, he simply thinks it may not get any worse.

And 'not worse' could be enough to generate a rally here in the US.

For example, if Europe is bottoming out, he thinks Eaton and PPG will both attract buyers.

"That's because these companies have taken out tremendous costs in Europe, not willing to wait around for revenues to turn. If the revenues do turn, the leverage would be magnificent. "

Of course, Cramer realizes his conclusion comes in stark contrast to the latest economic data which showed the euro zone jobless rate rose to a record 12.1 percent in March. Also it challenges recent results from many tech companies and automakers which also showed overseas weakness.

However, jobs numbers and earnings data are backward looking – looking forward Cramer sees positives.

"There's been a dramatic decline in borrowing costs for troubled nations such as Spain and Italy. Italian bonds that yielded 7% now yield 4%."

Also Cramer thinks that austerity may have run its course.

"The slowdown has at last arrived in Germany, and therefore, I think Germany will be more open to stimulus, perhaps even a rate cut by the European Central Bank come Thursday," he said.

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All told, Cramer thinks investors may need to think about Europe differently; not necessarily as getting stronger, but perhaps not getting worse eithe

"The view dovetails with the bank earnings we are seeing. Remember in 2009 US banks bottomed before all other stocks, maybe the same thing is happening in Europe. Could that at last be happening on the continent? Stranger things have happened," Cramer said.

Call Cramer: 1-800-743-CNBC

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