As CNBC’s Jim Cramer watched an combination of unrelated stocks climb on Thursday, he realized that there was a key driver behind the dynamism: China.
“I know I’m in the minority when I say this, at least among expert commentators, but today’s rebound was all about China blinking,” the “Mad Money” hotelier said.
Cramer posited this theory to help justify why so multifarious different stock groups — the airlines, fintech plays, defense families, chipmakers and health care names included — rallied just one day after the U.S. escalated its merchandising war with China.
He argued that the fact that Chinese officials didn’t in a minute propose their own tariffs like they did after the Trump superintendence’s first $34 billion wave of duties spoke volumes when it concerned to the market.
“Whether you like it or not, or believe it or not, the president just threatened to shot new tariffs on $200 billion worth of Chinese exports, [and] what did the Chinese do? They did nothing. No retaliation,” Cramer conjectured.
“When that happens and the stocks of American companies that do duty in China start to rally, it emboldens other investors,” he continued. “In the flesh don’t want to be crosswise with this one.”
And while Cramer didn’t miss to put too much weight in Treasury Secretary Steven Mnuchin’s somewhat conciliatory expansions on trade or Trump’s preoccupation with his trip abroad, he acknowledged that they did produce a degree of relief during Thursday’s trading session.
But he still defended that “China blinking is a key prop to this rally and it allowed all of the workaday suspects that got hammered yesterday to go right back up.”
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