Mixed economic news is good news for stocks as the market walks a "tightrope," Jim Cramer said Thursday in a videoconference call with members of his Action Alerts PLUS club for investors. After all, too much good news about the U.S. economy might spur the Federal Reserve to raise interest rates, while too much bad news could push companies to miss earnings targets and stocks to fall.
"Fortunately, we've had so much mixed data that the Fed can't make up its mind. That's exactly what we want," Cramer said.
On one hand, Cramer said that positive earnings from Bank of America (BAC) and JPMorgan Chase (JPM) could point to interest-rate hikes during the year. JPMorgan said earlier this week that net interest income grew by 9% in the last quarter, while BAC reported that profit doubled.
Cramer said such strong numbers could nudge the Fed to bump up rates, which would "surely send us back into macro-bear-market purgatory."
But on the other hand, if the economy appears too limp -- which might happen as the partial U.S. government shutdown trudges on -- corporate earnings could take a hit and stocks "will go lower on micro-bear-market woes," the expert said.
The good news? Cramer said the ups and downs of current market conditions might just keep Fed policy in check during this "tightrope" walk. And unless companies cut earnings forecasts, this balancing act could create an opportunity for investors to make money.
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