Jim Cramer, on “Mad Money.”
- CNBC's Jim Cramer on Tuesday suggested that the market is being brought down by some companies with business in China.
- "If you own stock in a company that expanded heavily into China, it's being killed right now," he said. "That's become a serious problem for the market, and I don't see it getting better any time soon."
CNBC's Jim Cramer on Tuesday suggested that the market is being brought down by some companies with business in China.
"If you own stock in a company that expanded heavily into China, it's being killed right now," he said. "That's become a serious problem for the market, and I don't see it getting better any time soon."
There are many "pernicious forces" currently working against bullish investors, according to Cramer — like companies missing quarters due to weaker-than-expected demand from clients, or tanking tech stocks as a new rate cycle dawns. But he said companies that rely on China for growth are having a particularly tough time on the market.
Cramer said the Chinese government doesn't always favor American businesses, and the country's consumers seem to be "more cash-strapped than any time this century." He listed several companies whose business in China is lagging, including Procter & Gamble, Estee Lauder, Nike and Starbucks. He elaborated on the fraught nature of the U.S.'s economic relationship with China, suggesting these issues won't be resolved as quickly as many businesses say they will.
According to Cramer, a reason smaller cap stocks are doing well is because, for the most part, they don't do a lot of business with China.
"Therefore, they have nothing to apologize for and nothing to write off," he said. "Still, one more great reason why they can withstand the selling pressure while they await the rate cuts that will soon be upon us."
Money Report
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Procter & Gamble, Estee Lauder and Starbucks.
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