Jim Cramer’s 6 Potential Catalysts That Could Boost Stocks

CNBC’s Jim Cramer on Monday sought to focus on potential catalysts that can help propel stocks higher, saying he wanted to “put the downside risks aside and focus on the upside risks.”

“You want to understand this market, don’t just focus on the downside risks. Of course, there’s a lot to worry about if you’re bullish, but there’s a lot more to worry about if you’re bearish,” the Mad The money, ”the host said.

Here is Cramer’s list of six “upside risks” to stocks.

Wall Street is nearing the end of what has been a “remarkable earnings season” as businesses grapple with the challenges and supply chain complications associated with the delta variant of Covid, Cramer said.

It’s possible that the next batch of financial results “will continue to be very strong,” Cramer said. “From healthcare and tractor-trailers to manufacturers and banks, most of them have done much better than expected, although the market has not always appreciated this strength.”

Cramer said bearish investors are losing sleep over the prospect of the Federal Reserve keeping its very accommodative monetary policy a little longer than expected due to the delta variant.

“There are just too many businesses that are affected by the virus, especially small businesses, making it much less likely that the Fed will even talk about slowing the economy instantly like some people are saying,” Cramer said. . “It doesn’t matter that we have a fabulous job count on Friday as we see over 100,000 new cases of Covid a day.”

New money entering the market could help prolong the rally in stocks, Cramer argued.

“There’s $ 4 trillion on the sidelines. We thought it was $ 3 trillion, but then we learned about another trillion in money market funds that can’t really stay there because their interest rates are so paltry, especially compared to high-quality dividend-paying stocks, ”Cramer said.

At the same time, Cramer said increased activity from private equity giants such as Blackstone and KKR could also be on the horizon. “If we get a wave of leveraged buyouts that could offset the slowdown in takeovers, thanks to the Justice Department’s tougher stance on antitrust laws, be careful,” Cramer said.

As GameStop and AMC are the star kids in the chat room-driven meme-action frenzy that began in January, Cramer said bearish investors need to be aware of the risk of their bets on other companies going backwards. against them.

“AMD has been stuck in the mud for ages, waiting for the Xilinx acquisition to close, but there is a substantial short position here, so the memesters struck and they bought AMD hand in hand. You never know. where they’re going to hit next, ”Cramer said.

The bipartisan infrastructure package being negotiated is likely a boon to the economy, Cramer said, and the recent extension of the moratorium on evictions by the Biden administration means that “people who are not evicted can use this. money to buy things or even invest in the stock market. “

“Meanwhile, child tax credit payments inject even more discretionary income” into the economy, Cramer said.

“Bearish hedge funds keep on capitulating, and they have. They have to buy stocks to keep up with the averages. These guys prefer to wait for a pullback, but this bull refuses to give them a good entry point,” Cramer said.