The S&P 500's record high is a 'tale told by an idiot' and ignores the pandemic's economic fallout, Jim Cramer says

• The S&P 500 and Nasdaq's new record highs show how divorced the stock market is from the economy, Jim Cramer said on Tuesday.
• "The S&P's new highs are a tale told by an idiot," the "Mad Money" host said during his show.
• Cramer dismissed the idea that the market recovery reflects a V-shaped economic recovery, as the Dow Jones Industrial Average would have rebounded too in that case.
• "The winners in this market are the companies that are most divorced from the underlying economy," Cramer said.
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The S&P 500 and Nasdaq's record closes on Tuesday highlight the stark disconnect between the stock market and the economy, according to Jim Cramer.

"The S&P's new highs are a tale told by an idiot," the host of "Mad Money" on CNBC said during his show on Tuesday.

"Full of sound and fury, signifying nothing about the hardship of millions of people on food stamps, or the millions about to be fired from service jobs, or the homeless, or the people who are just huddled at home waiting for the vaccine," he continued.

The S&P 500 closed at 3,390 points on Tuesday, notching its first record close since February 19 and marking the shortest bear market since 1929, according to CNBC. Meanwhile, the Nasdaq closed at 11,211 — a striking rebound given it traded below 7,000 at its lowest point in April, an increase of some 60%.

Cramer said it was "not just wrong but actually laughable" that the indexes' fresh highs reflect a "V-shaped" economic recovery. The Dow Jones Industrial Average would have rebounded too if that were true, he continued, yet the index is still down about 4% this year.

"We've had a magnificent V-shaped recovery in the stock market, but the stock market's not a great reflection of the broader economy anymore," the former hedge fund manager said.

"The actual economy's in precarious shape, especially now that the government's stimulus package has run out and Congress went home for the summer rather than trying to come up with a replacement," he added.

Apple, Amazon, Microsoft, Alphabet, and other tech stocks have spearheaded the stock-market recovery this year. Financial, industrial, retail, leisure, and other stocks have lagged behind, as investors fear slower economic growth, lockdowns, and travel restrictions will hammer earnings for months to come.

"The winners in this market are the companies that are most divorced from the underlying economy," Cramer said.