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NEW YORK (TheStreet) -- In the lull until earnings season, the markets are returning to stocks that do well when the economy does well, Jim Cramer told his Mad Money viewers Wednesday. That's despite the battle that rages over high-frequency trading.
Cramer said that investors are once again hopeful the economy is really improving, and that's why Caterpillar (CAT) was able to surge over $100 a share. Strong auto sales also helped General Motors (GM), a stock Cramer owns for his charitable trust, Action Alerts PLUS, end the day in the green. Cramer said if Friday's employment numbers a good, look for these gains to continue.
The markets are also still embroiled in the high-frequency trading debate, Cramer continued. He said these trades continue to meddle in the markets, preventing traders like you and me from getting the best prices possible. Cramer called high-frequency trading a tax on the markets, one investors cannot avoid, sadly.It's unclear whether the SEC feels high-frequency traders fulfill a function or if the agency thinks the issue doesn't matter since it has been around so long. Cramer posited that perhaps the SEC feels that it's OK the markets aren't entirely fair.
No matter what the reason, however, Cramer said the only way to remove the high-frequency "tax" would be to create a new, alternative market where they simply aren't allowed. That notion has already been proposed, and is one Cramer supports.
Apple in LimboShares of Apple (AAPL - Get Report), another Action Alerts PLUS holding, are in limbo, Cramer told viewers. Apple is no longer considered a growth stock by many but it also isn't quite considered a value name either. Cramer said Apple certainly qualifies as a value stock, trading at just 12 times earnings while the market overall trades at 17.3 times earning. But even with this paltry multiple, Apple is down 3% so far in 2014 while old-line tech names like Hewlett-Packard (HPQ) and Oracle (ORCL) are up 18% and 8%, respectively.
How can this be? Cramer explained that both HP and Oracle offer investors the promise of a big upside surprise as the economy improves. Apple offers no such promise.