The fact that the market rallied Thursday in the face so many lousy data points has more to do with politics than economics, Cramer said Thursday.
Retailers, for instance, were rescued by presidential politics. While many parts of President Obama’s jobs bill may not get passed, it looks like he might have the votes to extend unemployment benefits. And Cramer thinks those benefits have been the mainstay behind good retail sales numbers.
There wasn’t good news for manufacturing, with Federal Reserve data showing manufacturing activity is slowing down. However, the group has actually priced in a recession.
“As bad as things may seem, people are expecting worse,” Cramer said.
So when when its not as bad as people are expecting, like Cummins’ bullish analyst day earlier this week, it's hard to keep shorting these stocks, he added. That’s why Caterpillar went higher instead of lower when a firm recently cut numbers for the company.
The financials were saved by U.S. Treasury Secretary Tim Geithner, who told Cramer Wednesday that there would be no European Lehman Brothers. The financials are making very little money on loans, are being hamstrung by state and federal lawsuits and their estimates are being cut. But once Geithner took another Lehman off the table, Cramer said you had to figure the big move down was done for now.
And tech stocks are up, even though the European portion of tech earnings should get hurt. Cramer said that’s because tech’s seasonality—when it tends to go up each year—trumps European weakness.
Transports, mineral and mining stocks are also rallying, even without China, Cramer said, because the dollar is losing against the euro. Traders purchase mineral and mining stocks when the dollar’s weak. Given that the intervention by the Western governments is designed in part to save the euro, he said, this trend can overtake Chinese negativity.
“You see, the politicians, who are meddling in every single nook and cranny of capitalism, are in charge right now,” Cramer said. “We are in one of those bizarre moments where the pols are trumpeting agendas that, for once, are viewed as positive by the stock market.”
Enjoy the ride, he said, but remember politicians are often fickle and often fail.
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When this story was published, Cramer’s charitable trust owned Cummins and Caterpillar.
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