- Wall Street should have been down Tuesday, yet the stock market had a great run.
- The usual suspects all lined up against the market.
- CNBC’s Jim Cramer listed three primary reasons for what he called the “bizarre action” in the market.
Wall Street should have been down Tuesday, yet the stock market had a great run.
The usual suspects — tons of negative analyst notes, rising bond yields, mixed earnings, light housing data and spiking commodity prices — all lined up against the market Tuesday. Not to mention, St. Louis Federal Reserve Bank President James Bullard’s comments a day earlier that a 75-basis point interest rate hike could be a possibility at an upcoming policy meeting to accelerate the central bank’s fight against inflation.
“If the usual suspects all have alibis, what can explain today’s unexpected rally,” CNBC’s Jim Cramer said on Tuesday’s “Mad Money.” “I think we tend to underestimate our advantages,” he added.
Cramer listed three primary reasons for what he called the “bizarre action” in the market.
- The market was oversold, which makes it harder for stocks to plummet.
- Cramer recalled 1994 when the Fed doubled rates and stocks still rallied. If history is any indicator, Bullard’s tough talk might not be so bad after all, he said.
- Another reason for the market’s resilience Tuesday, according to Cramer, is the U.S. being in a better position than other countries, pointing to America’s reopening economy and reliable energy sources.
While inflation is admittedly a problem, Cramer’s got an answer for that, too.
“We got higher flank steak prices, more expensive corn flakes and bigger gasoline bill, but we also have much higher wages to combat the pain,” he said.
Source: Business - cnbc.com
