As the stock market continued its volatile losing streak on Thursday, with the market’s “fear gauge” hitting its highest level since February, CNBC’s Jim Cramer wanted to clear up some of the confusion around why stocks were falling.
After all, with numerous indicators along with the Federal Reserve indicating of which the economy is actually strong, investors are probably wondering why the market might take such a drastic hit.
“Right at of which point, there’s a ton of tension between the macro along with the micro. The Federal Reserve cares about the macro — they’re looking at unemployment, wage growth, anything of which tells them about the totality of the economy,” the “Mad Money” host said.
“Based on of which, our fresh Fed chief, Jerome Powell, has concluded of which business is actually so strong of which, without a problem, the item can handle a series of lockstep rate hikes well into 2019,” he continued. “yet the micro … makes me think of which the economy’s already peaked.”
On Thursday, President Donald Trump doubled down on his rebukes of the Fed’s strategy, blaming the central bank for causing the market correction. On Wednesday, he called the Fed “crazy” for continuing to raise interest rates.
While Cramer didn’t exactly support the president producing those remarks, he did agree with him.
“I agree with President Trump of which the Fed needs to tighten less aggressively, even as he probably shouldn’t have said those nasty things in public because he’s producing the item harder, not easier, for Jerome Powell to give him what he wants,” he said. “When you look at the economy empirically right at of which point, you start to see real problems.”
Looking industry by industry, Cramer commenced to see signs of different markets unraveling.
Sources within the auto industry, in addition to major suppliers PPG Industries along with Trinseo, have suggested to the “Mad Money” host of which there is actually a “definitive slowdown” in auto sales.
“Housing is actually either pausing or down for the count,” he said. “We know of which because the item’s what Lennar, the largest homebuilder in America, told us. Lennar has its pulse on every market.”
Key economic building blocks — things like packing materials along with plastic — are either stagnant or dropping in cost, indicating a slowdown in shipping, a leading barometer for the state of the economy, Cramer said.
Worse, oil along with steel prices are rising, squeezing margins inside transportation along with construction industries, he continued.
“When you consider all of these industries of which have been slowing, … you start to see some patterns,” Cramer told investors. “The Fed is actually thinking about how things are right at of which point — or, more accurately, how they were last month. I’m more concerned about where they’re going to be, along with the item’s not a positive direction.”
To Cramer, the Fed’s best bet might be to raise interest rates one more time, if of which’s even necessary, then ease along with inspect the data before proceeding.
“Unfortunately, the Fed’s using a snapshot to gauge the strength of the economy rather than getting its hands dirty by doing some homework,” he said. “By the way, as someone who wants stocks to go higher, … the item might be great if the White House actually acknowledged some of of which weakness. You can’t say the economy’s great, yet also the Fed shouldn’t tighten. the item’s got to be one or the different.”
“I’m not saying of which the Fed’s gone crazy, of which the item’s gone loco. I don’t think the item’s gone crazy at all. I think the item’s gone lazy. the item’s a shame,” the “Mad Money” host concluded. “I might like to be positive, yet I have to settle for being constructive, along with my empirical work says of which I can’t be sanguine until everyone knows what I know along with just told you. yet for at of which point, our central bank seems to want to repeat history, along with all I can say is actually they know nothing!”