U.S. stocks gained on Monday, but the day's rally was dampened by news that Germany and other top-rated European nations could see their credit ratings cut. So what's right, Cramer asked, the morning's rally or the afternoon's pullback?
Stocks have tied their fortunes to a hoped-for resolution of the European debt crisis. Optimistic investors bought shares in the morning after French President Nicolas Sarkozy said Germany and France had come to an agreement on tighter fiscal controls for the euro zone, to be voted on Friday. But reports of potential downgrades for every euro-zone nation hit markets hard by late afternoon, erasing part of the day's gains.
Two weeks ago, the markets appeared on the eve of destruction, but Cramer noted the market is now in a better mood. Attitudes changed after the world’s central banks agreed upon action that would avoid sizable bankruptcies and ease the strain of the economic crisis. Meanwhile, China cut rates and when the Chinese government wants its economy to grow, Cramer said it takes the world with it. Despite this, Cramer noted there are still a lot of challenges out there, including and especially regarding Europe’s debt woes. If Europe is back on a growth path, that’s welcome news, but investors should curb their enthusiasm because there will likely be bumps along the way.Page 1 of 2 | Next Page