CNBC’s Jim Cramer was amazed that President Donald Trump’s tweet suggesting an imminent government shutdown and North Korea’s missile launch weren’t enough to send stocks down on Tuesday.
“Oh, how the mighty haven’t fallen,” the “Mad Money” host said. “The market refuses to be brought down by news that would’ve crushed us at almost any other time in history.”
Cramer started with Trump’s Tuesday morning tweet balking at a potential deal with Democratic House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer to prevent a government shutdown.
“Meeting with “Chuck and Nancy” today about keeping government open and working. Problem is they want illegal immigrants flooding into our Country unchecked, are weak on Crime and want to substantially RAISE Taxes. I don’t see a deal!,” the president wrote.
There were times that the threat of a government shutdown would have sent markets into a nosedive, the “Mad Money” host said. Resolving government shutdowns can take weeks, which typically means weeks of turmoil for stocks as well.
Instead, stocks rallied on the news. Cramer said the rally could have been attributed to advances in the GOP tax bill, but he wasn’t entirely convinced.
“All I can tell you is that the stock market no longer seems to care about something that was incredibly important as a recently as a couple of years ago and now believes that the GOP has the votes to keep the lights on without Democratic assistance, something that will likely result in a more pro-business agenda and a new tax code,” Cramer said.
Then, North Korea’s government launched a ballistic missile, another event that has had a rattling effect on markets in the past.
But stocks held onto their gains, even before reports that the missile had landed in the waters off the coast of Japan came out.
“Today, we took it in stride,” the “Mad Money” host said. “Sure, stocks swooned a bit when we heard about the launch, but then they zoomed right back.”
Another stunning series of events unfolded in the bank stocks. Typically, lower short-term interest rates translate into declines in the financial sector.
Cramer said that pattern has “practically been etched in stone” because it signals that the Federal Reserve may not raise long-term rates as many times as the banks, which benefit from higher rates, would hope.
But as rates slid on Tuesday, shares of the banks — including the scandal-ridden Wells Fargo — climbed higher, even amid developments in the Wells Fargo debacle that expanded the breadth of its malpractices.
“These moves simply aren’t supposed to happen,” the “Mad Money” host said. “[Bank stocks] should’ve gone down today, not up, and their rally is destroying the orthodoxy that says this is an inconceivable situation.”
Certainly, Cramer spotted areas of the market where resiliency is hardly a running theme. The seemingly endless run in bitcoin reminds him of the dotcom bubble in 2000, he said.
Yet the “Mad Money” host predicted that even a collapse in the price of bitcoin wouldn’t trigger mass declines in the S&P 500.
“The bottom line? If you’re waiting for stocks to get obliterated by the bad news out of Washington or out of Korea or out of Main Street or out of retail or negative analyst calls and correlations that have produced so many past declines, I say don’t hold your breath,” Cramer concluded. “The mighty still stand tall and show no signs of tumbling. That’s how strong this market really is.”