Jim Cramer on Stock Record: Trade War Naysayers Must Apologize

Investment guru Jim Cramer claims people who predicted the U.S.-China trade war would significantly damage America’s economy should apologize.

Cramer spoke just before the S&P 500 hit a record high on Monday, while the Nasdaq hovered just below its lifetime high touched in late July, as a more conciliatory tone between the United States and China buoyed hopes for a possible trade deal and investors anticipated a rate cut by the Federal Reserve later this week.

“I think there’s some mea culpas that we need to hear from the people that said cyclical America would be damaged,” the “Mad Money” host said on CNBC.

“It turns out, the industrials are not as perturbed about China as you would have thought,” he says.

“I really liked the industrials that reported last week. Very solid. Really solid,” Cramer said. “It turns out, the industrials are not as perturbed about China as you would have thought.”

To be sure, the S&P 500 rose as much as 0.7% to 3,044.08, breaching the record intraday high hit on July 26, Reuters explained.

President Donald Trump said on Monday he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing, building on optimism from Friday when Washington said it was “close to finalizing” some parts of a trade deal.

Economic data shows that the trade war between the two largest economies has begun take a toll on both countries, leading to worries about a global slowdown.

Global central banks have responded by easing monetary policy. The Federal Reserve is expected to be the latest to follow that trend at its two-day policy meeting beginning on Tuesday, with wide expectations that it will cut interest rates for a third time this year.

“It just seems like the things that would disrupt the rally – tightening monetary policy - off the table. Some kind of big battle with the Chinese seems to be off the table, some kind of political upheaval seems be off the table,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. “All of that means the line of least resistance is higher.”