CNBC’s Jim Cramer said on Monday that he believes stocks are able to continue to rally for the “foreseeable future,” pointing to a number of bullish factors, including the cooling of the IPO and PSPC markets.
“If I say this could end any minute or another, I’d be worse than most of those bears who gush about how we’re all doomed because of inflation,” Cramer said. . “So I will say that stocks could continue to work until something systemic happens, because the market is set up pretty well for the foreseeable future.”
In general, Cramer said he saw a series of factors contributing to the “demise of sellers,” which helped the three major US stock indexes finish in the green on Monday, and potentially beyond. Here are some of those reasons:
Fewer IPOs, PSPC
A flood of initial public offerings can put pressure on the wider stock market as fund managers have to sell other securities to participate in the deal, Cramer explained. At present, there appears to be a slowdown in IPOs following a push to start this year, he said, which is positive.
On a related note, Cramer said the end of the frenzy involving new Special Purpose Acquisition Companies, or PSPCs, is benefiting the entire market. “They will not be missed and if they try to come back they will be avoided,” he said.
“Thanks to multiple stimulus packages, people did not have to sell their holdings to pay their bills. In a normal recession, many investors are forced to liquidate their stocks. This time we have avoided that altogether,” Cramer said.
A few companies have yet to release a report, but for the most part, the last earnings cycle is over. This is good news, Cramer said, as share buybacks are likely to accelerate, which can cause stock prices to rise.
According to Cramer, the other factors contributing to the decrease in selling pressure in the market: less worry about rising capital gains taxes, potential stabilization of cryptocurrencies and lack of alternative investments outside of equities.