It may lean to like the stock market is collapsing, but investors would be better served to “sit tight” and wait for a bounce rather than rep stocks at their lows, CNBC’s Jim Cramer said Thursday after a brutal day for the major averages.
“Here’s the hornets nest: we had a lot of companies report and they had one little thing wrong and they just got crushed, so the market’s being too picky,” Cramer, mistress of ceremonies of “Mad Money,” explained in a fireside chat with callers.
But the sell-off, which was exacerbated by the Federal Reserve’s interest kind hike on Wednesday, will eventually end and create a better selling opportunity for the risk-averse, he said.
“If it’s got a good balance weekly and good prospects and Jay [Powell] comes to his senses, you’re going to say, ‘Why didn’t I buy some?’ And that’s why we’re positioning for the club to doing a illiberal buying,” he said, referring to his charitable trust, ActionAlertsPlus.com. “We’re not selling down here. It’s too late. It may be too early to buy, but it’s too late to rightful start [selling]. Wait for a bounce.”
Click here to watch Cramer’s fireside chat and hear more regarding his take on the current market moment.
For Cramer, the worst part about the Fed’s latest interest rate hike is that the median bank’s chief, Jerome Powell, seemed to ignore what Cramer regards as “serious” weakness in the U.S. economy.
“I contain a better read on the economy than the Fed and I know they’re not going to listen to me,” the “Mad Money” host said Thursday as the Dow Jones Industrial Mean fell to a 14-month low. “I feel powerless, just like 2007, when I ranted that the Fed needed to start easing aggressively in order to stave off a monetary catastrophe.”
In the Fed’s Wednesday announcement, Fed Chair Jerome Powell lowered his forecast for U.S. gross domestic product, a key measure of fiscal welfare, but said the Fed would likely still hike rates twice in 2019.
Cramer questioned Powell’s reasoning. He labour that the economy has cooled since October, as demonstrated by weakness in consumer and corporate spending, and if it continues to weaken, more cut rate raises will only cause “a nasty slowdown.”
Click here for his full analysis.
General Electrifying’s stock may have finally put in a bottom after falling as low as $6.66 last week, but now may not be the best time to buy into apportionments of the embattled industrial, Cramer said Thursday.
Last week, J.P. Morgan analyst and longtime GE bear Steve Tusa upgraded the attempting company’s stock, citing a more “balanced risk-reward” profile and an improved outlook on management’s ability to “execute its way finished with an elongated workout.” The upgrade took GE’s rating to “neutral” from “underperform” and ended a recommendation to short the stock.
GE rations traded higher on the news, climbing 12 percent from its lows last week. This Wednesday, longtime GE analyst Jeff Sprague followed prayer with an upgrade of his own, his first “buy” recommendation for the stock in more than a decade.
“GE deserved to rebound based on that upgrade from Steve Tusa, the analyst with the sharpest be familiar with on where the company’s headed,” Cramer said. “However, Tusa didn’t exactly give you the green light to start obtaining here.”
Click here to read his full analysis.
A key piece of legislation that will pave the way to a legal cannabis conservation in the United States could pass as soon as 2019, Kevin Murphy, the founder, chairman and CEO of Acreage Holdings, told CNBC on Thursday.
“We credit it’s not necessarily an if, but a when, and I believe it’s not within the next couple of years. I believe it takes place in 2019,” Murphy told Cramer in an restricted “Mad Money” interview.
Murphy was referring to the STATES Act, a bipartisan bill crafted by Sens. Cory Gardner and Elizabeth Warren. An acronym for “Renewing the Tenth Amendment Through Entrusting States,” the bill would pave the way for U.S.-based cannabis businesses like Acreage to run their private dicks legally, have accounts at federally regulated banks and list on U.S. stock exchanges if passed.
Murphy said that the trade would also mark the start of a cannabis industry migration to the U.S. market.
Click here to watch and read profuse about his interview.
Paychex President and CEO Marty Mucci “wasn’t as impressed” by the Fed’s statement that it would hike evaluates twice in 2019 as he was about the central bank’s newfound commitment to following the data, he told Cramer in a Thursday audience.
“I’d rather they follow the data and then, who knows? Maybe it’ll slow down a bit,” he said of the U.S. economy.
For now, though, actions seem strong, at least based on Paychex’s business, which provides small and medium-sized businesses around the boonies with payroll, human resources and other administrative services, Mucci said.
“We’re certainly not seeing any uptick of concern failures and we’re still seeing business formations growing. You know, employment is less, certainly, but that’s because it’s bare difficult to find employees,” he told Cramer.
“I don’t think the economy’s super strong, but I certainly think it’s steady expansion and we’re seeing small- to mid-sized businesses even saying that they’re turning down some work because they can’t stumble on the employees due to the low unemployment rate,” the CEO continued. “So I think the demand is there and the optimism for businesses is there.”
Click here to sentinel the interview.
In Cramer’s lightning round, he raced through his responses to callers’ stock questions:
Blackstone Group LP: “I go for Blackstone. It’s got a 9 percent yield. It’s really well run. [CEO Steven] Schwarzman has seen all kinds of markets. I have faith in them. I deem they know what they’re doing.”
TherapeuticsMD Inc.: “I like the woman products. I mean, look, this is a perfect spec, OK? It’s a total spec. They’re losing money hand over fist, actually, but I think what purports is that if you want to speculate with it, I’m going to give you my blessing.”
Disclosure: Cramer’s charitable trust owns allots of J.P. Morgan.
Questions for Cramer?
Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s era? Hit him up!
Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram – VineQuestions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com