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Cramer Explains What’s Sending Stocks Higher

Although the S&P 500 snapped its six-day winning streak Monday, Jim Cramer noted that stocks have largely been able to push higher despite an array of economic concerns, including weak commodity and shipping numbers.

“So, what’s going on here? What’s behind the weak fundamental commodity and shipping numbers and the strong move up in stocks?” the “Mad Money” host asked. “How could we have ten straight up weeks in Europe, and five straight in the U.S.?”

Cramer sought to answer his own question by making the following three points, which he outlined in detail in the embedded video.

First, Cramer argued that people invest in companies, not commodities, and many companies are making a lot of money right now.

Second, he said investors want to see companies’ profits — not revenues — push higher because greater profits produce greater dividends. (RELATED: Cramer's Top Dividend Stocks)

Third, he pointed out that the economy is largely dependent on the condition of the housing market.

To Cramer, economic indicators like commodity prices or freight rates are only obscuring the earnings and dividends that are actually propelling stocks higher right now.

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