CNBC’s Jim Cramer warned Friday that a drop in oil prices has helped the stock market recover, but investors’ outlook could quickly change when the Federal Reserve meets next week.
“I’m glad oil is down today,” the “Mad Money” host said. “It changed everything.”
Stocks rebounded on Friday amid falling oil prices, with major averages able to claw back some of their losses after four straight sessions of declines. of Dow Jones Industrial Average was 509 points (0.98%) higher, but S&P500 and Nasdaq Composite They rose by 0.86% and 0.96%, respectively.
Technology stocks led the economic recovery. adobe and oracle after the bell Thursday. Kramer said the report breathed new life into struggling enterprise software and data center stocks, pointing out the following: Dell, Vertive, Cisco, marvel, GE Vernova and hewlett packard enterprise as a potential beneficiary. Cramer’s Charitable Trust, a portfolio managed by CNBC’s Investment Club, owns stock in GE Vernova.
With few major earnings reports released, Cramer said market movements next week will largely depend on oil prices and interest rates.
The first major variable is the Iran war. Cramer said progress towards peace could lead to a significant drop in oil prices, easing inflation and interest rate pressures. But he warned that renewed fighting could quickly reverse Friday’s sense of relief.
“But if Iran decides to attack the carrier group with a swarm of drones, oil prices will skyrocket, interest rates will skyrocket and stock markets will be in turmoil,” he said.
Investors will also be looking at: sales force The annual Dreamforce conference kicks off Monday in San Francisco. Kramer will meet with CEO Marc Benioff on Wednesday and meet with other executives at events throughout the week.
The biggest event scheduled is Wednesday, when the Federal Reserve’s Open Market Committee meets. Cramer said the consensus is that policymakers are expected to raise rates to curb persistent inflation.
He will be watching closely to see how long-term Treasury yields react. of 30 year treasury He said yields could actually fall after a rate hike if bond investors view Fed Chairman Kevin Warsh’s decision as evidence of more discipline on inflation.
Still, Cramer warned that further rate hikes would make an already tough investment environment even tougher. “If the Fed tightens, the bulls will be fighting the Fed, and fighting the Fed is never a good idea,” he said, urging investors to be cautious when using cash and avoid using margin.
The impact of rising interest rates will also be noticed in the following cases: lenner I will report after the close of trading on Wednesday. Kramer said mortgage rates remain high, weighing on housing demand as homeowners with existing low mortgage rates remain reluctant to move.
restaurant company blinker international TurboTax parent company intuition An analyst meeting will be held on Thursday. Kramer remains bullish on Brinker, Chili’s parent company, saying the company “keeps surprising me.” He also pushed back against concerns that AI could disrupt Intuit. Cramer pointed to Salesforce’s recent strength. ServiceNow This is evidence that investors are becoming reluctant to sell existing software companies simply because AI could threaten their businesses. Cramer’s Charitable Trust owns stock in Salesforce.
