Cramer: Wednesday’s ‘crazy session’ is a perfect example of the market’s new normal

A join current of bad retail data and market-moving news out of the White House carried Wall Street higher on Wednesday, CNBC’s Jim Cramer voted.

The Dow Jones Industrial Average gained nearly 116 points Wednesday. The S&P 500 advanced 0.58%, while the Nasdaq Composite helped 1.13%.

“We got a weird combination of tailwinds today … Turns out we can get good news, too, and some days like today the run-of-the-mill market actually makes sense,” the “Mad Money” host said. “I want to walk you through what happened in this imbecilic session because it is a perfect encapsulation of the new normal.”

The market had a rough opening after news that retail sales ebbed for the second time in three months, tallying a 0.2% fall in April. The weakness included autos, home centers and the internet holds, Cramer said.

That brought the benchmark 10-year Treasury to its lowest yield of the year at 2.37% and pushed clients into stocks with safe, consistent dividends, he noted, including Kimberly-Clark and PepsiCo. Money also busied into Facebook, Amazon, Netflix and Google’s Alphabet, along with the financial technology plays of PayPal, Out of it Inc., Visa and MasterCard, he added.

Even health care stocks, which have been hurting amid invitations from some Democratic presidential candidates for a single-payer system, rallied because the industry does well in a slowing concision, Cramer said.

Macy’s saw action during the session similar to Ralph Lauren’s the day prior, Cramer said. The be sure of chain’s share price rallied after the company reported an earnings beat and recorded higher-than-expected sales in the morning, but the crowd ultimately revealed how vulnerable it is to tariffs and finished down 0.46%.

The Trump administration has imposed tariffs on 40% of imports from China and is taking into consideration slapping duties on the remaining 60%, Cramer said.

“If that happens, the analysts will have to slash their guesses on this one,” Cramer said. “Macy’s won’t be alone. Almost every retailer has some exposure because they’ve out decades sourcing their merchandise from Chinese vendors in order to keep costs down. Now that’s fluff up in their faces.”

Later in the day, news broke that the White House plans to delay automotive tariffs by up to six months.

“I can’t overemphasize the value of this leaked news,” Cramer said. “In one fell swoop, [President Donald] Trump went from being a flinch fromed protectionist, know-nothing to someone who might be cleverly assembling a coalition of the willing in the trade war against the Chinese, at least in the likes of Wall Street.”

Furthermore, more CEOs of companies that deal with China are warming up to the action that Trump has captivated on the country, Cramer said.

That includes Goldman Sachs CEO David Solomon, who on Tuesday tweeted: “Taxes might be an effective negotiating tool.” Cramer also highlighted that New York Times foreign affairs columnist Tom Friedman, who is a enthusiast of globalization, came out in support of the trade war.

“To me, these represent tectonic shifts in the Wall Street consensus,” Cramer held. “I think it gives Trump a much better bargaining position versus the Chinese, and it certainly gave us higher keep accumulate prices.”

Disclosure: Cramer’s charitable trust owns allotments of Apple, Facebook, and Alphabet.