CNBC's Jim Cramer attributes the market's rise to record levels to both consumer and business demand. The host "Mad Money" breaks down how performances in luxury brands reflect consumer power. Later in the show, Cramer explains what the $ 10 billion defense contract awarded to Microsoft means for the computer's cloud services.
Demand is the catalyst in the market's rise to record levels
Traders work on the New York Stock Exchange.
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Demand drives Wall Street to new highlights all the time, CNBC's Jim Cramer said Monday.
The S&P 500 rose almost 1
The S&P 500 set a previous closing high of 3,025.86 at the end of July. The index jumped from an intraday low of 2,822.12 at the beginning of August, according to FactSet, to stage a 7.7% gain through Monday's market close.
"Without strong demand, the average would never have made it this far," the "Mad Money" hosted it. He added that a US-China gun deal helped "a number of flagrant stocks recover their mojo."
Luxury marks show domestic consumer is in good shape
Cruise ship anchored off shore of Grand Cayman Island, Royal Caribbean cruise liner Mariner of the Sea
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Strong stock performance in the final consumer's discretionary room shows the broader US economy "may be in better shape" than investors expect, Cramer said.
Cramer, using charts from technician Bob Lang, a colleague and publisher of ExplosiveOptions.net, looked at some of the top names in the consumer discretionary sector. This includes a variety of non-essential goods and services such as motorhomes, cruises, snowmobiles and timeshares.
"It's about as discretionary as it gets," the host said. "This type of stock only works when the consumer is willing to use and the banks are willing to lend."
Strength is with Microsoft after winning JEDI contract
Microsoft CEO Satya Nadella (L) and Amazon CEO Jeff Bezos visit before a meeting of the White House US Technology Council in the state dining room of the White House 19 June 2017 in Washington, DC.
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The US Department of Defense gave Microsoft "the best possible validation they could get" by awarding a multi-billion dollar defense agreement to the company's cloud platform over Amazon, Cramer said.
At the other end of the spectrum, losing on the potential $ 10 billion contract is not a "big deal for Amazon," the host said. The request for proposals came to two of the most valuable companies by market size.
"The Pentagon basically states that Microsoft's cloud platform is as good as Amazon's, or at least close enough to government work," Cramer said, adding that it is "a much more significant benefit for Microsoft Azure than it would have been for the Amazon Web. Services. "
Cyclic shares show resilience, may go higher
A trader is working on the floor of the New York Stock Exchange (NYSE) ahead of the opening clock, January 4, 2019 in New York City. After a strong work report from December, the Dow Jones Industrial Average rose 350 points by Friday morning. In a television interview Friday morning, National Economic Council Director Larry Kudlow said he believes there is & # 39; no recession in sight. & # 39;
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Dow and AT&T are worth buying
Randall Stephenson, Chairman and CEO of AT&T.
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In an environment where the bond market offers little payout – the return on the 10-year US Treasury is 1.85% – Dow and AT&T offer both higher returns and potential growth opportunities, Cramer said.
"I recommend buying some here, and then maybe wait for the Fed to say something on Wednesday that slams into the market, or maybe the Labor Department's profitability on Friday shows a surprise fall, you can buy some more for weakness he said. "Be patient. Dow and AT&T are now paying you safely to wait.
Cramer's Lightning Round
In Cramer's Lightning Round, "Mad Money" the host slips through his thoughts on the callers' favorite stocks of the day.
Realogy Holdings: "Full disclosure: my wife works for them. I think it's OK. I worry about the housing market. I think the housing market is just, for what they are doing, just OK, not good enough. is a cheap stock. I hesitate to say more than that. "
Wendys:" Everyone thinks that Wendy's and McDonalds are going to be in an incredible war over breakfast. I think Wendy's & # 39; s in good shape and the stock is exaggerated on the downside. I might wait until it costs $ 20 to buy some, but I really like Wendy's. "
Disclosure: Cramer's charitable trust owns shares in Amazon and Microsoft .