CNBC’s Jim Cramer said Monday that a series of increased risks has made him much more cautious about stocks.
“I’m not that bullish,” the “Mad Money” host said. “My bullishness can wait. I think there will be a better time to buy than now.”
The caution comes as several pillars of Cramer’s bullish outlook are under pressure. Surprisingly strong jobs numbers reduce the likelihood of a Federal Reserve rate cut, while SpaceX’s looming IPO, Apple’s weakness and the prospect of additional AI funding raise new questions about whether the market can sustain its recent gains.
“Things have changed, and for the worse,” Kramer said. “There is cover in this market, and it is dangerous to ignore it.”
At the top of Mr. Cramer’s list was Friday’s surprisingly strong jobs report, which he said undermines the case for rate cuts this year.
Cramer said the expectation of one or two rate cuts was a key pillar of his bullish thesis. He now believes the report was strong enough to “make the case that we may need to raise rates to cool the economy, rather than cut them to boost the economy.”
He also expressed concern about SpaceX’s upcoming IPO. Demand for the product appears to be strong, but Kramer warned that an overly enthusiastic debut could ultimately backfire if the stock price soars to unsustainable levels before plummeting.
“What if the stock price gets too high and then we see a disgusting drop after that moment, just because there’s not enough inventory to circulate?” he said. “It could be very bad. It would probably tint things very negatively for a while.”
Apple is also a cause for concern. Mr. Kramer said he hoped the company’s Worldwide Developers Conference would be a catalyst for the stock price to rise, but the stock actually fell.
“Apple is the leader. Probably the leader. I don’t want to lose this stock market leader,” he said.
Finally, Cramer pointed to Alphabet’s recent $80 billion equity raise to fund additional artificial intelligence infrastructure. While he praised the execution of the IPO, he worries it could encourage other technology companies to raise money from investors and drain liquidity from the broader market.
Cramer said the prospect of higher interest rates, uncertainty surrounding the SpaceX deal, Apple’s struggles and the risk of additional stock issuance all add up to create a much more difficult backdrop for the stock.
“So a Fed rate cut is probably off the table, a deal with SpaceX would siphon money from the rest of the market, more stock issuances could do the same, and now Apple is on the clock too. That’s more negativity than I can handle,” he said.
