On Wednesday you could almost hear the bulls cheering on Wall Street as the S&P climbed into record territory and then closed at an all time high.
Stocks pared their 2014 losses entirely with two stocks gaining for every one that fell on the New York Stock Exchange.
When the market achieves this kind of milestone, pros such as Jim Cramer like to dig down into the price action and examine what moved the market and why.
In this case, Cramer thinks the rally was generated by a string of pleasant surprises.
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"Let's start with the banks. For almost every single quarter over several years, the banks have generated concerns when they reported," noted Cramer.
But not this time.
"That's amazing," Cramer noted. A week ago many investors would never have thought that possible.
And that was hardly the only pleasant surprise.
That's a pleasant surprise because Cramer thinks it signals that the personal computer market is bottoming. "My charitable trust owns a position in Intel and believe me when I say that I'm concerned the stock has moved up too far too fast. But my instincts tell me to stay long. The stock is too strong to believe that there isn't something very good going on here."
"This move says to me that down-and-out techs, of which there are many, could be very undervalued if they have good balance sheets and lots of customers," Cramer explained. "Sometimes companies just don't run their businesses very well and nothing motivates management better than the attention of an activist hedge fund."
Cramer's is also seeing the same kind of good news in construction. "Caterpillar has really started to get momentum," Cramer said. The Mad Money host believes it's because "business has become quite strong in the United States lately and inventories have actually gone down to more than acceptable levels."
Another pleasant surprise.
"Then there's the oil tanker business. Don't look now, but day rates are soaring, going as high as $100,000 a day on some routes—that's up about $80,000 from the end of the year. Lots of this is because oil that would normally have gone from Venezuela to the United States is now going to China," Cramer said.
That suggests fears of a slowdown in China may be overblown.
Now that's not to say Cramer isn't aware of all the negatives in the market, he is. "There's been a decline in mall traffic and the price of oil has slipped precipitously," Cramer noted.
Nonetheless, Cramer thinks all the pleasant surprises in the market demand consideration. "It may be a sign we're at a positive point of inflection," he said. And if you're a bull, that too, is a pleasant surprise.
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