With U.S. stocks hitting record highs after hopes of a new trade deal between the U.S. and China, CNBC’s Jim Cramer said people who predicted the economy’s downfall should apologize as the S&P 500 hit a new record high Monday morning.
The S&P 500 was up 17 points to 2,039 shortly before lunchtime on the East Coast on Monday, and has been steadily climbing for the past month.
The new record prompted Cramer to point out that a lot of people were wrong about the effect the trade war would have on the U.S. economy and markets.
“I think there’s some mea culpas that we need to hear from the people that said cyclical America would be damaged,” Cramer, the host of CNBC’s “Mad Money” said on the network’s “Squawk on the Street” program.
The reason for the new record high is better-than-expected third-quarter earnings from 206 S&P 500 companies, of which 78% have beaten analyst expectations, according to FactSet.
“I really liked the industrials that reported last week. Very solid. Really solid,” Cramer said. “It turns out, the industrials are not as perturbed about China as you would have thought.”
The trade war with China has been waging for well over a year now, causing China’s gross domestic product has sunk to its lowest level since 1993 at 6%, down from the second quarter’s 6.2%.
U.S. GDP also has slowed but came in at 2% during the second quarter, which isn’t great but is steady.
Global growth also has slowed behind the Trump tariffs on China, but a slowdown with industrials has reversed with some “rather remarkable” numbers, particularly from companies like United Technologies and Honeywell, Cramer said, pushing the S&P 500 up to its new record highs.
“Every single one of these were much better than expected, and they were much better than expected from either self-help or the world isn’t as bad as we think,” Cramer said.
The U.S and China agreed to a bit of a ceasefire earlier this month when U.S. President Donald Trump held off on raising tariffs, and China agreed to purchase more U.S. farm goods. Officials also said Friday the two sides are “close to finalizing” and agreement.