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With
the world distracted by a Brexit this week, Jim Cramer has watched China
suddenly gain amazing strength.
"We've
got a crouching tiger, hidden by Brexit scenario … strength that has been
ignored as investors focused on all of the Brexit related capital
destruction," the "Mad Money" host said.
As
the world's No. 2 largest economy, China matters a heck of a lot more to Cramer
than the U.K., which is the fifth largest economy.
China's
strength has manifested via a 2.7 percent rally in the Shanghai composite and
multiple positive days for the Baltic Freight index. This suggested to Cramer
that China is importing raw goods. The rally in oil and rebound in copper also
indicated that China has increased demand.
There
were two additional reports on Tuesday that translated to Chinese strength for
Cramer. The results from both Carnival and Nike
were evidence of acceleration in Chinese consumer spending.
Both
companies have brands that typically cost more than most Chinese people could
have afforded five years ago. Sale were spurred by a migration out of the
country into the city, Cramer explained, where consumers could make more money.
This was also the catalyst for Apple sales in China.
On
the company's conference call, Carnival CEO Arnold Donald confirmed China was
the strongest region for the company.
Nike
also confirmed that its leading growth maker was China, as it experienced a 44
percent increase in Chinese direct-to-customer sales.
"There
is no denying that the global financial system is in worse shape ever since the
U.K.'s Brexit vote … but the same apparently cannot be said for China,"
Cramer said.
The
data all added up to China being up, not down for Cramer, as he speculated that
this could be the reason why the blow of a Brexit seems to have softened.
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