CNBC’s Jim Cramer warned Wednesday that the market’s recent rally is short of the sustained rally investors are hoping for.
“Whenever a market goes into turmoil and then starts to come back up, there’s always hope that there’s going to be a big move forward,” Kramer said on “Mad Money.” But after two days of gains, he added, this is not one of them. “It’s limited, it’s small, and it lacks real leadership to tip the hat.”
Stocks ended Wednesday’s trading higher, with the Dow Jones Industrial Average up 0.48%, the S&P 500 up 0.72% and the Nasdaq 1.16%, but stocks ended at record levels as investors tried to look for signs of a decline in the Iran conflict.
Instead, Kramer said, the rise is primarily driven by data center companies, particularly memory and storage companies benefiting from demand for artificial intelligence. These stocks are rising not because of strong execution, but because of supply constraints, Cramer explained. “They haven’t been able to build capacity fast enough,” he said, adding that while the group continues to grow, it’s not the type of leadership he wants.
He contrasted it with companies such as: Nvidia He said this represents the true growth leadership the market needs – a company that manufactures and sells cutting-edge products at scale.
He noted that he was particularly concerned microsoftquestioning its ability to exploit its dominant position. He said the company’s stock is struggling despite having “the biggest possible advantage.”
Mr. Kramer also expressed concern about widespread market participation. Retail stocks performed mixedly, with financials largely flat, and home builders failed to rise meaningfully, indicating that business confidence remains fragile.
Ultimately, Kramer said the lack of follow-through on this rally speaks for itself.
“Those familiar with the rally know that the second day was supposed to be strong, with new leadership and extensive follow-through that lasted until 4 p.m. and didn’t end until early afternoon. That didn’t happen. The rally started to lose momentum around 1:30 p.m. It was still a good day, but it could have been much stronger and more powerful,” Cramer said.
