There's a looming threat for the stock market and it has nothing to do with China, Cramer says

With all of the investors fretting about the trade war with China and the Federal Reserve's plans for interest rates, what CNBC's Jim Cramer is really worried about here is jeans.

"Yep, I think the biggest threat to this bull market is denim," he said Wednesday on "Mad Money" as stocks rose on hopes of a U.S.-China trade deal. "I, right now, at this very moment, am more worried about jeans than I am about China."

Cramer was referring — somewhat jokingly — to Wednesday's news that denim company Levi Strauss filed the paperwork for an initial public offering. While he admitted that "it's an exciting deal," he said it will likely cause investors to sell shares of market stalwarts like PVH and Ralph Lauren so they can get in on the IPO.

"Now, maybe you think I'm being small-minded here — it's just jeans, right? Wrong. See, it's not just jeans," he said. "We're about to get a tsunami of new initial public offerings that will flood this stock market with new supply, and there simply isn't enough money coming into the stock market to be able to handle all of this merchandise."

Just consider some of the biggest upcoming deals: Slack, Uber, Palantir, Airbnb, Lyft, Pinterest, Postmates, Doordash and Reddit all plan to go public to the tune of billions of dollars — in Uber's case, $120 billion.

When Slack, for example, goes public, money managers will probably sell shares of competing work collaboration platform Atlassian to make the money to buy Slack shares, since "they most likely won't have much new money coming in to fund those purchases, so they need to sell something if they want to do any buying," Cramer explained.

This effect will play out over and over with each IPO, the "Mad Money" host warned. When cybersecurity firm Palantir goes public, people will sell Palo Alto Networks or Proofpoint. When Postmates or Doordash IPO, GrubHub will get sold. When Uber shares finally hit the public market, hedge funds could even sell Facebook, Amazon, Apple and Alphabet.

"These will be natural sources of funds," Cramer said. "Historically speaking, nothing slaughters a bull market as effectively as a burst of new IPOs and secondary offerings. Whenever this has happened in recent years, we've seen whole sectors crushed by a cascade of selling. It's just the nature of the beast."

And while he acknowledged that most of the upcoming deals are from companies that have great track records, Cramer worried that the market simply won't be able to sustain the IPO tidal wave.

"My worry has to do with supply and demand. When you get a surge of new supply without any increase in demand — meaning without much new money coming into the market — that's going to be bad for prices of all stocks," he said.

"The bottom line? We are about to get hit with a perfect storm of IPOs, and regardless of how good this new merchandise might be, I'm concerned that the market won't be able to handle it all without taking, maybe, all stocks lower," Cramer concluded. "More than anything else — China, the Fed, the possibility of another government shutdown — it's this deluge of deals you should be worrying about because nobody else is."

Disclosure: Cramer's charitable trust owns shares of Palo Alto Networks, Facebook, Amazon, Apple and Alphabet.

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