As the Dow Jones industrial average soared over 330 points on Thursday, CNBC’s Jim Cramer addressed the reasons behind the market’s wildly positive action.
“Investors decided they were willing to pay more for stocks because good, old-fashioned companies, not just autonomous-driving, bitcoin-operated, artificial-intelligence-led, machine learning [plays], keep delivering upside surprises,” the “Mad Money” host said. “In short, you have to abandon all cynicism to understand this market.”
In a market where old-line companies are delivering alongside high-tech, Silicon Valley giants, sellers are few and far between, Cramer said.
Meanwhile, most Wall Street strategists have gone on the record to say that they’re very negative on 2018 because of how stretched valuations have gotten.
“If big-time money managers are really worried about next year, they need to start selling now,” Cramer said. “Their funds are too big to dump everything on December 31. But at the same time, these funds need to outperform the averages or they’ll lose their clients, and in a raging bull market like this one … you need to own stocks in order to outperform.”
“They face this impossible situation,” Cramer continued. “They want to leave because of 2018, but if they leave, their annual performance will suffer, which is why natural sellers, right now, aren’t surfacing.”
So with buyers aplenty and prices on the rise, Cramer gave 10 reasons for why the stock market feels like it may be melting up and ignoring the fundamentals.