S&P 500 Rally Can Continue on Decent Earnings, Cramer Says

If earnings this season are decent, the index may continue to rally, says Cramer.
By Laura Sanicola ,

The S&P 500 reached a record high shortly after the opening bell on Monday, and TheStreet's Jim Cramer said the market rally can continue if earnings are at least "decent."

The benchmark index rallied to an intraday high Monday of 2,143 following an outstanding jobs report on Friday. The index hadn't reached such levels since May 21, 2015, when it closed at a record 2,130.82.

"We are all based on the optimism that there was too much pessimism," Cramer said.

Cramer said stocks have been rising on macro concerns that the U.S. is the only place to put money. But investors will be closely scrutinizing earnings reports as the index's performance in the coming weeks is in part beholden to second-quarter corporate earnings. Aluminum giant Alcoa (AA) - Get Report  will report earnings after the markets close on Monday.

Stocks rose Friday after the U.S. added 287,000 jobs to payrolls, beating forecasts of about 170,000. But low inflation compounded with uncertainty over the U.K.'s decision to leave the European Union likely means the Federal Reserve won't raise interest rates in the near future.

Two weeks ago the market saw what Cramer called "redemption Monday" when the U.K. vote sent global markets into a tizzy.

"We saw more money come out of the market than in any time since 2009," Cramer said. The fallout, according to Cramer, created people that thought "the world was ending" and who were "brain dead."

The election in Japan over the weekend also gave U.S. markets a boost Monday as Liberal Democratic Prime Minister Shinzo Abe's ruling coalition gained a majority in the upper house. Investors see this as a positive sign for a larger fiscal stimulus package to be pushed through in the fall, which could improve the Japanese economy. Japan's Nikkei 225 index added 4%, its largest one-day gain since March.

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