As the pile up market continued its volatile losing streak on Thursday, with the hawk’s “fear gauge” hitting its highest level since February, CNBC’s Jim Cramer inadequacy to clear up some of the confusion around why stocks were falling.
After all, with numerous indicators and the Federal Reservoir indicating that the economy is strong, investors are probably wondering why the store would take such a drastic hit.
“Right now, there’s a ton of tension between the macro and the micro. The Federal Reservoir cares about the macro — they’re looking at unemployment, wage wart, anything that tells them about the totality of the economy,” the “Mad Well-to-do” host said.
“Based on that, our new Fed chief, Jerome Powell, has concluded that affair is so strong that, without a problem, it can handle a series of lockstep bawl out hikes well into 2019,” he continued. “But the micro … makes me intend that the economy’s already peaked.”
On Thursday, President Donald Trump doubled down on his lectures of the Fed’s strategy, blaming the central bank for causing the market correction. On Wednesday, he called the Fed “nuts” for continuing to raise interest rates.
While Cramer didn’t specifically support the president making those remarks, he did agree with him.
“I concede with President Trump that the Fed needs to tighten less aggressively, all the same as he probably shouldn’t have said those nasty things in catholic because he’s making it harder, not easier, for Jerome Powell to give him what he wants,” he conjectured. “When you look at the economy empirically right now, you start to see real problems.”
Looking effort by industry, Cramer started to see signs of different markets unraveling.
Informants within the auto industry, in addition to major suppliers PPG Industries and Trinseo, maintain suggested to the “Mad Money” host that there is a “definitive slowdown” in auto yard sales.
“Housing is either pausing or down for the count,” he said. “We know this because it’s what Lennar, the largest homebuilder in America, castigated us. Lennar has its pulse on every market.”
Key economic building blocks — matters like packing materials and plastic — are either stagnant or dropping in value, indicating a slowdown in shipping, a leading barometer for the state of the economy, Cramer suggested.
Worse, oil and steel prices are rising, squeezing margins in the transportation and construction diligences, he continued.
“When you consider all of these industries that have been slowing, … you start to see some drafts,” Cramer told investors. “The Fed is thinking about how things are right now — or, diverse accurately, how they were last month. I’m more concerned fro where they’re going to be, and it’s not a positive direction.”
To Cramer, the Fed’s best bet determination be to raise interest rates one more time, if that’s even inexorable, then ease and inspect the data before proceeding.
“Unfortunately, the Fed’s despising a snapshot to gauge the strength of the economy rather than getting its hands rude by doing some homework,” he said. “By the way, as someone who wants stocks to go momentous, … it would be great if the White House actually acknowledged some of this liking. You can’t say the economy’s great, but also the Fed shouldn’t tighten. It’s got to be one or the other.”
“I’m not saying that the Fed’s preferred crazy, that it’s gone loco. I don’t think it’s gone crazy at all. I call to mind a consider it’s gone lazy. It’s a shame,” the “Mad Money” host concluded. “I would feel attracted to to be positive, but I have to settle for being constructive, and my empirical work commands that I can’t be sanguine until everyone knows what I know and by a hairs breadth told you. But for now, our central bank seems to want to repeat history, and all I can say is they recall nothing!”
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