Declining. 23 . And the nasdaq dipping. 17 this session . Frankly, theres no one answer that explains why stocks are so resilient here. This is a complex and complicated market. Instead, there were a number of important factors at work. Lets get to it. Lets go over the reasons why the market hasnt been absolutely destroyed despite the crash of the Malaysian Airlines plane over ukraine and the ratcheting up of the antirussia rhetoric by president obama and his people this weekend. Pretty much, the markets decided for now that whatever sanctions we put on russia are not going to hurt the earnings of u. S. Based companies. Now, im not so sure if the conventional wisdom here is correct yet. Its certainly right if the west, including the United States does nothing more than what weve already seen against russia. The current sanctions arent going to hurt any companys earnings because i dont believe that putin is going to shut down, nationalize, or kick out the companies of any western countries that are looking to punish russia just yet. I think part of the reason why theres no corporate bite to these sanctions is simply because europe, it isnt suicidal. If you think like the europeans do, its all well and good for president obama to talk about cutting russia out of the commerce equation, but its europe that would bear the economic brunt of ostracizing the russians. And they dont want to do that. If russia cuts off the energy that fuels most of europe, we wont get cold here, but they will. You cant just tell them, hey, put on a sweater. Oh, jimmy carter tried that. We dont get our natural gas from russia, they do. They could freeze if russia decides to retilluate against our sanctions that they joined. So were held back by the shiver fear in europeans. If russia decides to stop trading with the u. S. , u. S. Based companies will face cuts. I could see the russians kicking out mastercard and visa which have tens of billions of credit cards there. Russia could put its own credit card system in place, something they boast about. So why arent these stocks down big in anticipation of what happened . Well, mastercard and visa have been adamant about nothing to worry about. We could also see some of the Machinery Companies get hurt and russia could kick out pepsico. As well as the other packaged goods and numbers. Numbers will come down for the companies. But all of these estimate cuts will be telegraphed, and russia, again, isnt that big a driver to the earnings of u. S. Companies. Not that big of a country. Most of the s p 500 would not be directly impacted by tougher sanctions and the vast majority wont notice somethings happened. People are reluctant to slam down the s p futures knowing that a lot of companies in the s p, by the way, a lot of the russell 2000 companies, they dont know where russia is. But europe would have boat load of companies that will miss the numbers if sanctions get too tough. I believe many European Companies could be kicked out of russia starting with the oils, namely bp. Plus, its possible that europes recovery could reverse entirely. Throwing the continent back into recession. The house of pain. Anyone that believes that europes getting thrown back into recession irrelevant to our Companies Truly hasnt been paying attention for the last couple of years so many of the multinationals i follow did roughly on average 20 of their earnings from europe. The push back from russia on any really tough sanctions could cause these numbers to come down. Thats another reason why i think the markets being too glib. Sanctions will hurt our companies if europes economy gets clobbered. I will say the market hasnt correctly assessed the downside yet and theres potentially more downside if the europeans decide to commit economic suicide by going along with president obama and hammering russia. But theres another reason why the stock market hasnt been demolished here. Bonds, the flight to quality trade has sent Interest Rates low for bonds once again. And, you know, bonds look like they were going to go down and rates were going to go up until this. And thats been the endless trade. The one that really confounds. The bond market equivalent stocks do well. Third reason for resilience, selfhelp. Look at allergen today. They announced huge layoffs, put out an earnings per share forecast for 2016 which makes the stock seem very cheap, you have to wonder if you can do better by voting for the ceo than the hostile takeover. Allergens not going down, dave pyatts right. Same thing could happen tomorrow time warner, that company could issue very big projections that could make you think twice about how much youre going to get from fox versus staying with time warner. Fourth reason, aside from the hostile merger attempts, weve got a number of deals occurring as a matter of course. There are so many acquisitions happening right now, we dont bother to talk about most of them. For example, did you hear anyone talk about how International Game technologys being bought out . 4 billion. Who cares . How about purchasing rockwood holdings. 6 billion acquisition, former chemicals power house. I dont know if it rated its own article. Its kind of like the tiny agate type about some relative callup from the minors. Fifth reason, the activists. Very good activist hedge fund has taken up a position in emc, asked the company to fully spin off its fastgrowing vmware subsidiary. The emc stock has been flat lining for a long time. This news sent it soaring. When companies were vulnerable, pressure from activists, you get very nervous if you arent fully invested. Sixth reason, my weve had some awfully good earnings. And those earnings have translated into higher prices. Overshadowing the gaps by a large margin. Its hard to sit out of a market when so Many Companies beat out estimates and raise numbers. Weve got this terrific theme going, the return of old tech. I think its got staying power right through earnings season. And then how about this . Stellar earnings from Chipotle Mexican Grill after the bell and an astounding Comparable Store sales, that doesnt hurt either. Stock up 10 . Hey, guys, you know i love you, why dont you split the stock so people can do more than buy the burrito. Seventh reason why the market hasnt been crushed, no ipos lately. Remember when the new offerings were coming fast and furious . Thats no longer the case. Buy, buy, buy, buy were not seeing a lot of new stock for sale which helps keep the supply and demand in balance. But in many ways, its the most important ingredient of a strong market. In the end, stocks are pieces of merchandise. When theres too much merchandise for sale, you get price cuts, plus the big buybacks. Johnson johnson this evening announced this 5 billion repurchase. Its about time the stock is down four straight points. They reported that good quarter. Finally, the new fed chiefs the same as the old one. No hurry to raise rates. No matter how many people say shes behind the curve because of rising inflation. Shes waiting, shes patient, she will not be bullied by hedge funds that have a lot to gain if rates are driven up by the fed. There, i said it. Im not saying this is a perilous situation right now. My view, i simply want to wait for lower prices before i do any more buying. If they sounds bearish to you, so be it. I think the consensus the positives a little acute. If you took russia out of the equation, id be more sanguine, how can you do that . We got clobbered in cypress a couple of years ago. That was first ignored and whats happening now is a much bigger deal than that. Theres no reason to panic and sell, but can we just be patient and wait for a better chance to buy . Let me ask you, is that such a terrible, irrational risk . Why dont we go to guy in new york . Guy . Caller booyah, jimbo. Booyah, guy. Caller this is your favorite nicknamed addict from new york city. How are you . Im doing fine. How are you . Caller well, im getting killed, man. The good news keeps coming out and michael kors keeps going down thats a controversial stock. My friend, buddy pal Herb Greenberg was on today, hes got a reality check report about it. I dont know, its been going back to lawyers, whatever. Its been hard. I refer you to the 2 00 show. Im not a buyer of kors. Im not a fashion guy. I mean, well, ive got my daughter gave me a nice one of these ties, this for fathers day. Im not generally a fashion guy and i think that kors is a little too expensive. I dont need the controversy. We think this markets always right, that may not be the case. I say be patient. Let it come in. Youre not going to get hurt. On mad money tonight, gopro, its all the buzz from wall street to main street. Its changing the way we see the world. Should you go pro or go home . Hold on to your seats from my point of view on gopro. No one has this one, believe me. Honeywell makes the technology, keeps it under control. Hey, how about this . A company with devices keeping hearts healthy. Up huge in the past year. Stay with cramer. Dont miss a second of mad money, follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com. Or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. 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Despite all the hand wringing, were still in a market where companies that report terrific results, they see their stocks rally. Consider cramer fave honeywell, an Industrial Company that makes everything from Climate Control systems, security equipment, specialty materials, turbo chargers that can significantly boost your cars gas mileage, and refining catalysts that allow Oil Refineries to get more gasoline or diesel out of a given barrel of crude. Honeywells an incredibly run company. So its no wonder that when honeywell reported last friday, delivered an excellent quarter. 2 cent earnings beat off 1. 36 basis, and management also raised the low end of the fullyear earnings forecast. The companys transportation and universal oil Products Division really soared, just incredible. Even though honeywell made an new alltime high, its given you an 8 gain at the end of january, its got more room to run. Dont take it from me. Lets check in with dave cote to hear more about the quarter and his companys prospects. Mr. Cote, welcome back to mad money. Always nice to see you, jim. This is it, dave, the most optimistic, you didnt talk about things that were happening, green shoots down the road. You talked about great position in good industries, thats kind of a new rap i heard from you on that. Our Business Model from the beginning. Ive always said, we have like a threelegged stool, if you will to our Business Model. The first is to have a great portfolio to roll with. And that starts with great positions in good industries. Then we focus on our internal processes, or as i put it, youve got to make sure the machinery works every day. If they cant get implemented quickly and effectively, doesnt matter. And then our culture. If culture is what gives sustainability. Processing right. If this was not theres no caveats beginning at this call, dave. Come on, you always say, if i were more bullish, this and that. You didnt say that. Im not trying to jinx you. Im thinking maybe i should go back and start add juing juso make sure. The last quarter, i wasnt happy you felt you were too pessimistic versus the facts. And this one i felt was a very straightforward call. But what i loved about it was that you that all of the divisions are hitting on all cylinders. Yeah, actually, this was a nice quarter in that way. Its like, we had some you know, on the organic growth side. We had couple of glitches, id say, in the First Quarter for how it went and defense, we got whacked in the First Quarter. We took a look at the Second Quarter and everybody was doing well. And very much on the path. And you said defense has now run its course, the negatives. Third quarter should return to growth. And same thing next year. I thought you had a great quote in here. You said that for energy, energy, you design, youre designing to get more valuable products from every barrel of oil and for coal and natural gas. You are the company that is allowing dirty, socalled dirty oil become clean gasoline, right . Well, we do a lot of things. For example, if you take a look at a barrel of oil, what you would see is everything that you want to get is out of there. The vocs, the gasoline, diesel, bunker fuel, asphalt, everything is in a barrel of oil. The real trick is to get as much of the valuable stuff out of that as you can so you dont need as much oil in total. Right. Right. Also means, how do you allow a barrel of oil to whatever you do refine to be, say, really low sulfur when it comes to ceasebe diesel or gasoline. China business is strong again. Yeah, we are doing very well in china. In fact, last year, china became our number one country for sales outside the u. S. And its all because weve been focused on becoming local or what i call becoming the chinese competitor. Our sales yeartodate and for the total year will be up about 10 today for china. You also, look, you deliver the numbers, Free Cash Flow plus 28 , how is that possible . No, honestly, come on. Im looking, people say, jim, why didnt you like the ge call this morning . I dont know, it was kind of okay. I need to see Free Cash Flow, you cant get that. Im a big cash guy myself. I know you are. I was surprised. We focused on cash for 12 years. Starts first with highquality earnings. Because if you dont have highquality earnings, youre not going to have cash. And as you know, were investing capex in the business, and with that, our cash flow has been very good and is going to continue to be good. Well, dont you think its interesting that a lot of companies i like dividends, you know that. The Capital Allocation wasnt the theme in this quarter in terms of how much dividend. Because every business, the dollar end of the business is giving you great return. Oh, were getting great return. Some of the Chemical Plant investments, when you look at the amount of money and these are 30 , 40 type irr projects, you say wed be in insane not to put money into this. This is going to generate an unbelievable return for our shareholders. What is it like right now in the gulf area, the refining . Booming. Its booming. When you look at Everything Else in the u. S. And you talk about unemployment or wage growth or anything else, its not the problem in the gulf. And id say the gulf has got two things. One of the things theyve done is, of course, they happen to be the locusts of activity for this. The other thing is, those states work very aggressively to be business friendly. Yeah. Thats what matters. The whole idea of, gee, business is a good thing for society or as you put it, we should be celebrating business. And im not saying everything we do is good. I understand that. But at the end of the day, if you take a look at our 200 plusyear history, the reason americans live so long is government enabled business to be successful. I dont want the environmentalists to think i know youre an environmentalist and im an environmentalist, i dont want anyone to think youre not involved in this. You mentioned algae is for real. How many years out . Oh, no, we can do that today. This is an amazing story. Yeah, this is really the ability to make oil, lets say a dropin diesel fuel that you can actually put in your car, you can put in a plane. Its not hazardous. It doesnt need to be blended, its not corrosive like normal biodiesel, this is the real deal, dropin replacement. We can make that from algae, seaweed, almost anything you guys, honeywell can. We can do this. Now, interestingly, the cost of processing a barrel of algae oil is about the same as it is for a barrel of petroleum oil. It really is. Its not the cost of processing. What are we doing . The issue is accumulation. So you look at the oil industry, theyve had 100 years. Right. Trillions of dollars, and theyve invested huge pipelines, super tankers, Everything Else. You take a look at the say algae industry or the agricultural side, where a 4inch pipeline was a big deal in the oil industry. It hasnt developed yet. Okay. And what it does, its real. But the government backs solar. Why isnt the government doing something on algae . Yeah, i would say the whole solar wind thing, as you know, ive always looked at it and said, it needs to get to a point where its not tax credits that make it effective. And thats why weve always been nervous about investing in those areas. Anything you have to depend on for the government to make it viable is not a place we want to be. But this is real. This is going to happen. But you have to be impressed that the deficit has come down. I know that youre oh, yeah. This is a nice direction for this to be in. We shouldnt confuse that, though, with the problem is solved. My generation is still retiring. Youre not retiring for ages, please dont mention the word retire. I love my job. But if you take a look at the baby boomers, we are retiring, and just that alone is going to swamp the system. And thats coming. Even if you look at cbo forecasts, you see it go down a little bit and goes back up again. Wow. Well, i know it does. But its still, its everythings on a nice trajectory right now. Certainly is. Honeywell absolutely is. You should read the pack. You should read the deck. Its what happens when American Business does it right. After