- CNBC Mad Money host
Jim Cramer said a wave of "clueless" buyers is inflating stock market prices. - "Sometimes the market rallies and it makes perfect sense," he said on his show Tuesday. "Then there are days like today, when I can't take how stupidly bullish this market can be."
- He highlighted how shares of British Petroleum rose more on Tuesday — even though it slashed its dividend — than on the day it raised its dividend in February.
The stock market is being helped by a wave of "clueless buyers" contributing to a "stupidly bullish" environment, CNBC's Jim Cramer said this week.
The CNBC Mad Money host said Tuesday: "Last night, I told you not to overthink the run in the COVID
"Never underestimate the power of enthusiastic buyers who do not know what they're doing," he added.
Cramer's comments came as stocks gained on Tuesday as investor optimism around another round of coronavirus stimulus outweighed a string of disappointing earnings results.
"Sometimes the stock market roars and it makes perfect sense, but there's also plenty of stupidity, especially during earnings season when there's so much news that it's hard to keep track of what's going on," he added.
Cramer pointed out that the shares of oil major British Petroleum attracted significant buyer interest on the same day it slashed its dividend, something he called "probably the dumbest action this year."
BP cut its dividend for the first time since the 2010 Deepwater Horizon oil spill, slashing it to 5.25 cents per share from 10.5 cents a quarter earlier.
"Not only are they telling you business is terrible, BP is trying to distance itself from crude while preserving cash, but maybe that dividend hike was a mistake," the host said.
Tuesday's rally was a "bigger gain than they got in February when they told you business was great and they raised the dividend," Cramer said.
BP's shares closed 5% higher on Tuesday despite the gloomy dividend announcement.
Cramer said: "Turns out the market was just stupid because today, on the exact same news ... Sorrento rallied 31% to just under $13. The stock market's supposed to be efficient, but somehow it took Wall Street six days to process this news."
The S&P 500 has rallied more than 65% since hitting a yearly low of 2237.40 on March 23.
Cramer is not alone in questioning the market rally and optimism of investors.
Morgan Stanley said while it still expects a surprise US economic recovery later in the year, stocks will fall 10% first before that happens.