CNBC's Jim Cramer on Tuesday said the Federal Reserve policy was to blame for the December department, and that the agency's adjustments have since produced a beef market.
"The fact that Powell knows things are slow, well, it might be best this market has gone for it," Cramer said. "There is a reason we rallied from a very nasty opening and were short in black before a hiccup nearby."
The three major US indices saw a dip in Tuesday's session.
Coming from weaker than expected earnings report before Tuesday, Home Depot shares closed almost 1
"In reality, the home gets under way in the fourth quarter because of price rises, and now it's aroused because the Fed has changed its tune, making me bullish on Home Depot, not bearish," he said. "But turning this stock from hideous to just ugly at the end of the day speaks of how at least some people are catching the right way to look at things."
In addition, Caterpillar's share price lost about 2.4 percent on Tuesday due to a double downgrade from UBS, Cramer said. An analyst at the Swiss bank dropped equity from buying and selling and 12-month price target to $ 125 from $ 154 on concerns that slowing demand in construction, energy and transport will weigh in revenue and margins by 2020.
Cramer has a different look for the machine manufacturer. He believes a tough Fed can help the market rise this spring, and a potential US-China trading agreement, the world's largest economies, can help the world economy.
"Does anyone honestly believe that the world economy will not make a comeback if we can trade with the Chinese? I think Caterpillar is just that type of warehouse that would scream higher on some sort of deal with China," Cramer said. ] The host thinks this is a time to buy on Wall Street, and investors should ditch the idea that a downturn like last decade's financial crisis is threatening.
"We're no longer fighting the Fed, people. So don't be misled by data from the fourth quarter when Jerome Powell was still the stock market's enemy number one, "Cramer said." That's why I think you should buy, not sell, like Caterpillar and Home Depot. … When the Fed is your friend, this is just the kind of stock that likes to go higher. "