CNBC’s Jim Cramer said the stock market roared higher Monday after investors benefited from the “removal of uncertainty.”
“There’s nothing the market hates more than uncertainty — take it away and stocks go higher,” the “Mad Money” host said.
The major averages all shot up about 2% in Monday’s session, motivated by positive news for people on both sides of the political aisle.
Among the biggest drivers of the day were an announcement from President Donald Trump, strong polling numbers for his November challenger Joe Biden and optimism behind stimulus negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin.
Trump, who checked in to Walter Reed National Military Medical Center on Friday after contracting the coronavirus, in a midday tweet said he was “Feeling really good” and that he would be leaving the hospital Monday evening. The upbeat message signaled that Trump’s condition may not be as grave as previously observed, though White House physician Dr. Sean Conley told reporters that Trump “may not entirely be out of the woods yet.”
Biden received a majority of support in a new Reuters/Ipsos poll out Sunday for his widest lead in a month, scoring 51% to Trump’s 41%. A larger lead, and potentially larger Election Day victory, reduces Wall Street’s worries that the U.S. could see presidential election results be contested, Cramer noted.
“Now, don’t get me wrong, I’m not calling the election here — that’s a sucker’s game after 2016,” he said. “I’m just telling you what I see in the tape.”
Investors also hoped that the boost for Biden could translate to a boost for Democrats who are looking to get Republicans to agree to more coronavirus relief spending. Pelosi, who recommended on Friday that the airline industry hold off on executing more furloughs as the industry continues to grapple with low traveler traffic, suggested that Trump’s hospitalization could impact discussions.
The president himself urged in a tweet over the weekend that both sides come to a compromise on a stimulus bill.
“I think what we got today was the removal of uncertainty,” Cramer said.
With a clearer, yet still murky picture about the political and economic landscapes, Cramer said the passing of a stimulus bill, given that it would require more government borrowing that will prop up interest rates, could be a negative for the housing sector, but it will be a positive for the banking sector, which has been one of the biggest laggards this year.
“If [bank executives] can argue that business will get better with higher rates and show they’re doing well with the market’s newfound volatility and record stock issuance,” Cramer said, “then some of the financials might suddenly become buyable. The second-worst group in the market … could turn positive, and that would be a big deal, especially because they report next week.”
