CNBC’s Jim Cramer on Thursday suggested that Wall Street investors could be “grasping at straws” after stocks rallied, despite both welcome and unwelcome information.
“This market’s so desperate for good news that buyers are willing to grasp even the thinnest of reeds, which is why the averages were able to roar today,” the “Mad Money” host said.
The roughly 2% gains in the major stock averages were fueled by a big rally in the oil market, which has a heavy hand on other financial markets. That, however, was met by a surprising report on weekly unemployment filings.
“We now live in Bizarro World, where Wall Street can momentarily overlook the fact that 6.6 million Americans filed for unemployment insurance last week, a mind-blowingly horrible, record-breaking number,” Cramer said.
West Texas Intermediate crude futures jumped more than 24%, their biggest one-day increase on record, on President Donald Trump’s word that Russia and Saudi Arabia could cut crude production to stabilize prices and end a price war.
“I’ve been telling you we need oil to stabilize before we can get on terra firma,” Cramer said. “That looks a lot more likely today.”
Meanwhile, investors learned that unemployment claims came in significantly higher than the 3.1 million that economists surveyed by Dow Jones expected, due to shutdowns from the coronavirus pandemic. The Labor Department said the jobless figure came in at 6.6 million, a sum of 10 million filings over the last two weeks.
The unemployment numbers slowed buying on the market during intraday trading, but the S&P 500 finished at 2,526.90, about 6 points off its session peak.
Additionally, optimism remains high as investors anticipate the massive economic relief package kicking in, Cramer noted. The package includes direct payments to individuals and rescue money to support businesses affected by government-ordered closures or restrictions.
“Still, are we grasping at straws here?” Cramer asked. “At the end of the day, there are a lot of problems that can’t be solved by the $2.2 trillion stimulus bill, with COVID-19 foremost among them,” he said.