The Dow’s drop into negative territory on Tuesday shouldn’t surprise investors, Cramer said during Stop Trading!. Given the flood of equity into the market and disappointing economic news, stocks should be lower.
Banks have been issuing shares to repay borrowed Troubled Asset Relief Program funds, with $51 billion coming from just Bank of America , Citigroup and Wells Fargo . Also, producer prices rose 1.8% in November, a sign of inflation, while New York State manufacturing slowed and homebuilder confidence slipped .
But Cramer pointed to what he called “the resilience of this market” despite the tough economic climate, saying “who knows what would about happen if anything good happened?”