Jim Cramer: China May Explain This Weird Strength

Is China why they keep going up? Is that the secret to the strength?

As I look at so many leading stocks over the last two weeks, I am struck by their lack of commonality. Until Monday, that is. Today, we learned that in return for staying the December tariff hikes -- among other things -- we will gain access to the Chinese financial market as well as get some big ag orders.

So is that why the big banks have been doing so well? Is that why Deere (DE) won't quit? Is that really why the 5G plays are soaring?

It makes sense, doesn't it? Think about it. You can argue that JP Morgan (JPM) should be going down every rate cut, as you were supposed to buy it every rate increase, correct? Now we have to wonder if it's going up because it is the bank with the best contacts in China.

Or how about Citi (C) ? It's already been the bank with the Asian franchise pretty much ever since it's globalization move post-World War Two. No wonder its multiple is expanding when it should be contracting?

You have to wonder, however, why Mastercard (MA) , Visa (V) and American Express (AXP) aren't up more. Of these, Mastercard is the fastest growing. Visa's fine. But American Express is the company best set up to benefit, as it has an application in to sell cards with a joint venture partner, Lianlian. Of course, this is precisely the kind of joint venture that President Trump doesn't like. But it's something.

Then there's Goldman Sachs (GS) and Apple (AAPL) . It has been Goldman's and Apple's desire for their credit card to be all domestic. Do not forget that it's incredibly difficult to develop a credit card system from scratch and Goldman isn't ready to take on China. Put it in the "can't hurt" category. But then again, it doesn't necessarily help, as the stock of Paypal (PYPL) has done nothing since it got approval to buy GoPay as a method to gaining access to China. Maybe that relationship will be rethought?

Last Friday, Qorvo's (QRVO) stock went nuts after reporting that 5G orders are huge. That sent Skyworks Solutions  (SWKS) and Marvell Technology (MRVL) up big. They are the big three for pure 5G, as far as I am concerned. Now I am beginning to wonder whether the move was exacerbated because we are talking about relaxing restrictions on one of their biggest clients -- Huawei. It makes sense that the move was so pronounced, when you put it through this prism.

As for Deere, it really is something to be the only publicly traded company that the algorithms seem to recognize as a winner when it comes to China trade. It's been going up steadily the whole time that we have heard that the talks aren't going that well.

But let's understand each other. It's been the Chinese leaking endlessly that the talks aren't going well. My reporting has shown over and over again that the Chinese are unreliable in their behind-the-scenes comments, yet because of some sort of unfortunate bias, they are far more trusted than their American counterparts.

To me, the sticking points for this phase will be if there is something else we have to give up besides delaying tariffs -- as that isn't really that big an ask. That's what makes me a tad suspicious about this whole truce happy talk. What are the Chinese going to do to show they mean business ahead of the talks? They promised a big buy of agricultural products back in November. Nothing happened. They also said they would crack down on fentanyl coming to this country, something they repeated all spring, a personal issue that the president says must be dealt with. Given that only requires a series of arrests, why not?

We better see some soon, or I will have to be more circumspect about how well these talks really are going and don't expect to see the ban on Huawei lifted without something like this occurring beforehand.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long JPM, C, MA, MRVL, GS and AAPL.