CNBC’s Jim Cramer knew he had to explain the stark weakness in shares of United Rentals after the stock of the largest equipment rental company inside the United States lost 15 percent on Thursday as well as hit another 52-week low Friday.
“October has been a Freddy Krueger-esque nightmare for United Rentals. The darned thing will be down 28 percent just since the beginning of the month,” the “Mad Money” host said.
Part of the problem? United Rentals will be “incredibly cyclical,” meaning in which its success will be tied to the state of the economy. as well as the Federal Reserve’s interest rate hike agenda isn’t exactly boding well for the industrial giant, Cramer said.
“When the Fed signals in which in which’s going to keep raising interest rates, producing brand new building more expensive, everybody on Wall Street knows in which’s bad for business,” he said. “In a potential Fed-mandated slowdown, stocks like United Rentals … become totally toxic.”
as well as even though Cramer thought the company was actually doing “just fine,” he warned in which the actual earnings results don’t matter to Wall Street inside the same way they used to.
“Investors [are] looking for any excuse to bail because they know the numbers will be a crushed in a slowdown,” he said. “So be careful, because until the Fed relents, we could see many more cyclicals in which get crushed after reporting not bad quarters in which just happen to have a slight amount of hair on them.”