view transcript

We are in the midst of a period where we have to walk a tightrope. If we get too strong data, like we did from the loan departments of Bank of America and JP Morgan, then Fed Chief Jerome Powell will choose to raise rates a couple of times in 2019. Which would surely send us back to macro bear market purgatory. But if we get too weak a set of data, as might be the case by the way because the government shutdown, companies will miss their numbers and stocks will go lower or micro bear market woes. Fortunately so far we've had enough mixed data since the year began that the Fed can't make up its mind. That's exactly what we want. Plus we have gotten a real break. The stock market plunged so far so fast that even when companies disappoint on the top line as JP Morgan did, and the bottom line frankly, they don't go down as buyers want in because the overall market has gotten too cheap. Even after the rebound, it seems that almost every stock I hit up trades at eight, nine, ten, eleven times earnings. And unless the companies cut forecasts, you've got an opportunity here even as we are brutally overbought to make some money.

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 - Get Report) and JPMorgan Chase  (JPM - Get Report)  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.

Listen to Jim's Entire Videoconference Call

Want to hear all of Jim's call with Action Alerts PLUS club members? Click here for details.