Cramer, a leading market commentator, said it is too early to get bullish on the market, even if lawmakers reach a consensus on the debt ceiling crisis.
I keep recommending you maintain a high-cash position, even if the Democrats and Republicans cut a deal, because last time it was the gut punch of the S&P downgrade a few days later that really crushed us, he said in a report published by CNBC.
Cramer's remarks come a day after Fitch Ratings placed the AAA Long-Term Foreign-Currency Index of the United States on Rating Watch Negative, in the wake of a continuing political stand-off between President Joe Biden's administration and Republican lawmakers regarding the borrowing limit.
So far, this year's debt ceiling debacle has been running parallel to that of 2011, making the S&P's past downgrade especially prescient. Knowing what we know about 2011 is premature to get bullish on this market, Cramer said. Best to keep the cash on the sideline and waiting, he said.
Although the equity market did reflect signs of concerns earlier this week, NVIDIA Corporation's NVDA upbeat forecast and the sudden investor interest in AI stocks balanced the sour sentiments. The SPDR S&P 500 ETF trust SPY was up 0.87% to close at 2.43% on Thursday, according to Benzinga Pro.
According to latest developments at the time of writing, Biden and House Speaker Kevin McCarthy are close in on a deal that would raise the government's $31.4 trillion debt ceiling for two years while limiting spending on most items.
The deal, which hasn't been finalized, would raise funds for discretionary spending on military and veterans while essentially holding non-defense discretionary spending at current year levels, the report said.
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