While big wigs in Washington are sprinting to corral another coronavirus spending package, Wall Street is shrugging off the development of the measure, CNBC’s Jim Cramer said Wednesday.
“The stock market’s already made up its mind: It doesn’t matter,” the “Mad Money” host said. “That’s how we could have some solid action today.”
The major averages all surged during the trading day as Democratic and Republican negotiators were rumored to be close on another emergency bill to respond to the economic impact of the pandemic, though the indexes all finished well off their intraday highs.
The Dow Jones finished the session up 35 points at 27,816.90 for a gain of 0.13%. The benchmark S&P 500 rose 0.53% to 3,380.80, and the tech-heavy Nasdaq Composite, which was the only one of the three to retain most of its gains on the day, rallied 1.42% to 11,326.51.
“I can understand why so many Republican senators are reluctant to spend a fortune on another huge stimulus package. The averages suggest the economy’s moving in the right direction,” Cramer said.
“As far as the stock market’s concerned, we don’t need no stinking stimulus, and that’s absolutely true for your portfolio, but it’s necessarily not true for America,” he said.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke on Thursday in an attempt to stitch together a new effort to aid the U.S. economic recovery. While the two sides remain divided on “key areas,” according to Pelosi spokesperson Drew Hammill, ground has been made on a price tag for the fifth in a series of massive spending measures to respond to the health and economic crises at hand.
House Democrats have proposed a new $2.2 trillion plan, down from a $3 trillion bill the chamber approved this summer. Mnuchin reportedly proposed a $1.6 trillion bill, which is up from the $1.3 trillion the Trump administration had pushed for.
One thing the parties have agreed to is paying out another round of direct checks to Americans.
Small businesses and families are in dire need of more stimulus as they remain upended by the economic toll of the stringent lockdown earlier this year and ongoing social distancing orders.
“The broader economy needs a stimulus package … small- and medium-sized businesses are getting crushed,” Cramer said, adding that the market, however, “doesn’t see a recession. It sees a secular boom in certain industries, and that boom will blot out the parts of the economy that are most fragile.”
“A lot of smaller operators that don’t deserve it will go under, causing a lot of workers who don’t deserve it to lose their jobs,” he said. “Unfortunately, deserve’s got nothing to do with it.”