Jim Cramer: A Paris man would say that President Xi feels the master of vice

So, you want the best of all possible worlds? What about the one where retail sales are lethargic and where the president decides to suspend customs duties by 25% on imported cars. It's a recipe for a total boil and that's what we had today in an explosion of shopping after a hideous opening.

Listen, we need to clarify what makes a market really fashionable these days in a world where we are governed by tariffs and are negotiating with the Fed. The close followers of the economy and the Fed must find everything I am going to tell you about amazing, but they should get used to it, because that is the new dialectic as we do not have never seen it before.

As they say in sports – and it looks a lot more like bloody sport than economics – let's go to the video tape.

First, this morning, we received an incredibly low retail sales figure from the US Department of Commerce, down 0.2%. We thought it would be positive, but it's the second time in three months that retail sales have been down. Not only that, but the weakness was widespread: automobiles, home centers and internet stores. Could it be worse than that?

I do not think so.

Immediately, interest rates fell.

The tenth year is now at 2.3%. It's extraordinary. Last October, Fed Chairman Jay Powell spoke of the overheating of the economy. He had visions of the economy coming in 2019 with all his vigor, far too much, and he was the only one who could tame him.

So he programmed one and three, a hike last year and three this year.

In retrospect, I wonder how he could have been wrong. It's really extraordinary.

The weakness initially plunged the market into the red.

But shortly thereafter, when it seemed the market was going to give up yesterday's earnings, the president's leaders hinted that he was thinking of not applying any tariffs on imported cars. Since we were about to impose 25% duty on these imports, the market reversed and then increased.

I can not emphasize how important these new leaks are. In one go, Trump, a protectionist hated by elites, has become a president who brings together a coalition of people willing to oppose the Chinese.

Of course, we do not know if this is really the case or if Trump did not want the Dow to give up the gains of yesterday. Regardless, since tariffs are not applied in Japan and Europe, euphoric buyers have intervened and bought all the stocks that had been put on sale, especially companies with large companies in Europe such as Facebook (FB) and Alphabet (GOOGL). Alphabet held its "Google Marketing Live" conference in San Francisco yesterday and revealed a plethora of new advertisers and new advertising products that led Deutsche Bank to increase its numbers on a company recently removed a few weeks ago. .

Now consider this confluence. Your interest rates are lower, prompting buyers to buy high-yielding stocks such as Kimberly-Clark (KMB) and PepsiCo (PEP). You have rising technology stocks on a possible unified tariff front.

And you have a sterilized Fed, which turns out to be too tight, otherwise we would not be at the bottom in 2019 with long-term treasury bills.

The anemic retail figures make the President 's wacky obsession with Powell about this latest rate hike a reality that looks like politics.

Consider his tweet of the other day: "China will inject money into its system and will probably reduce interest rates, as always, in order to catch up, and will lose if the US Federal Reserve succeeds one day. "to match" the game would be over, we would win Anyway, China wants an agreement. "

Given the weakness of retail sales and the way China is moving around the world, Trump's screening makes sense.

I know this can be counterintuitive, but this environment is perfect for any business that does not need wind to make numbers … Previously, this only meant FANG and our self-appointed acronym revives with stock of Facebook 42% for the year, Amazon (AMZN) up 24%, Netflix (NFLX) up 32% – staggering given the dominant competition, especially Disney (DIS), especially with its increase of Hulu – and finally Alphabet up 12%%, but I'm expecting a lot of positive comments on the headline now that analysts are seeing that a change of recommendation can boost it up to ####################################################################### 39, now.

Oh, and for AA aficionados, that is to say, FAANG, Apple (AAPL) has stood out. Why not? If there really is the possibility of a coalition of supporters, then what antipathy can China afford to show to Apple. The $ 880-billion monster, so vulnerable to tariffs on all sides, might have bought goodwill here, which would make a decent return to $ 200, up from $ 186 today, before climbing at $ 191.

Now, we also have a whole cohort, the kings of the cloud who have become unavoidable names in a slowing environment. In fact, people seem to be making a point – if not a trend – for technologies that work well without a tailwind. So Workday (WDAY) roars, Splunk (SPLK) explodes, VMware (VMW) takes off, Twilio (TWLO) explodes above and Adobe (ADBE). The Trade Desk (TTD), which we spoke to yesterday with Adobe, has been running much higher than it should have been. It should never have been down to begin with. It's almost as if we're just weighing down the usual suspects, of course, fintechs, PayPal (PYPL), Visa (V), and so on.

Today, however, the rally had a particular twist. We know that everything about health care has been offered in the niche by Democrats without Biden, favoring the dreaded single payer concept. But the economy seems to have slowed so much that even pharmaceutical companies and healthcare management companies could pull themselves together.

There is only one skunk in the party and that is retail. Macy's (M) reported a huge time this morning and the title was looking for two points. But then, CEO Jeff Gennette said the chain of department stores may be vulnerable to tariffs on furniture. Do not forget that the action of Ralph Lauren (RL) was crushed yesterday because of the mention of sweaters and shoes from China that could be affected by customs duties. Macy's went even further when Gennette said his figures were not based on any higher rate increases. Since the president now seems to be linking his popularity to his crackdown on China, I wish you good luck.

Customs duties on the next $ 300 billion imports are likely to be the focus of concern and Macy's analysts will have to publish figures. Macy's will not be alone. Almost all members of his category have some exposure because they have spent years trying to cut costs by operating in China and that is exploding them now. As we know from Fred Smith, the CEO of Fedex (FDX), told us, you can not just switch a switch and move to Vietnam. As I look out the windows of One Market in San Francsico, I see gigantic freighters loaded with 21,000 containers and I know they are not coming from Cambodia, Thailand or Bangladesh. Perhaps the best hope would be to build in Mexico, since Trump will not impose new tariffs on Mexico and the costs may be much lower than those of China. What are they waiting for?

Now, one last thought: we see a lot more of a united front in terms of rates than I thought possible a few weeks ago. Lloyd Blankfein, former CEO of Goldman Sachs (GS), tweeted this morning that this may be a necessary evil. Tom Friedman and Steve Bannon found themselves in a love affair where tariffs were the only real way to change China. Yeah, Friedman the Timesman and Bannon the Wildman, have become state / economist men. For me, these are tectonic changes that show that the Trump movement is gaining momentum. A man from Paris would say, after today, that President Xi has the wind in his sails. I would say that Trump just does what he likes to do, moves the stock market with good news when it seems like it is deflating. Who would have thought that the good news could be real and that the market gives meaning to what must be one of the most difficult times that I have experienced during my 40 years of life. investment.

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