Jim Cramer says all of the rising on the market is not justified, but investors have some breathing room.
Investors have reason to stay optimistic about the market in the long run if the Federal Reserve continues to hold interest rates and there's hope that a trade deal with China will come through, CNBC's Jim Cramer said Tuesday.
"The run this morning had a lot more to do with a leap of taste, meaning money managers were buying the stocks of high-quality companies because their stories are meatier than the average investor may realize, even as they threw away other stocks that need good news on trade to go higher as the session moved on into the late hours," the "Mad Money" host said.
Investors are taking a"leap of taste" on Amazon because of AWS's connection to many highly-anticipated 2019 IPOs, including Lyft, Uber, and Airbnb, Cramer said. Shares of Advanced Micro Devices, Nvidia's competitor, bolted 11.8 percent Tuesday after landing a deal for Alphabet-subsidiary Google's game streaming platform.
Cramer said the increasing popularity of single-payer health care inside the Democratic Party, as explained by the New York Times, poses a threat to the way the insurance industry operates. But House Speaker Nancy Pelosi's favoring of incremental change gives breathing room to health care companies, he said.
"I'm calling that a leap of faith, perhaps based on hopes for a strong spring or perhaps a belief that, with lower interest rates, there will be more home equity loans and thus more spending," Cramer said."Don't know if that's in the cards yet."
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