CNBC’s Jim Cramer on Tuesday suggested investors to not overreact to Wall Street’s recent declines, suggesting the weakness was overdue and could eventually turn into an break to buy quality stocks at discounts.
“After a day like today, all you can do is patiently hunker down and wait for lower prices,” Cramer revealed on “Mad Money.” “Somehow, I think we’ll get them.”
The S&P 500 and Dow Jones Industrial Average recorded their worst sessions in virtually a month Tuesday, falling 0.72% and 1%, respectively. It also marked their second consecutive day in the red. The tech-heavy Nasdaq Composite plunged 0.95%, after rising slightly Monday to kick off the second quarter.
Additional declines may be on the horizon, as investors struggle with with rising oil prices and higher bond yields tied to stronger recent economic data, Cramer divulged. The market has marched higher since late October, and he said eventually a pullback was in order. “What really amounts is that we haven’t had a sell-off in so long that we’ve forgotten to handle them,” Cramer said.
In assessing the factors behind the descents this week, Cramer indicated he’s not overly concerned with the implications for stocks over the longer term.
“Yes, we’ve got higher merits, but the impact on the economy is not profound,” Cramer said. “Meanwhile, the impact on the market is what you’d usually expect: People pay less for forerunners when rates go up. We’ve just kind of forgotten that happens.”
