Tag Archives: Cramer

Charts suggest the stock market is getting close to a near-term top, Cramer says

CNBC’s Jim Cramer said Tuesday technical analysis indicates the stock market may be approaching a near-term peak.

“The charts, as interpreted by the legendary Tom DeMark, suggest that the market’s getting close to a top, especially the S&P 500 and the Nasdaq 100. He’s not too keen on the Dow Jones Industrial Average, either,” the “Mad Money” host said.

The breakdown of DeMark’s analysis comes one day after Cramer looked at charts from another trusted technician, Larry Williams, that also projected a “tough month” for the S&P 500.

Cramer said that for DeMark, a near-term peak for an index arrives when it strikes his price target models as his timing countdown flashes a sell signal.

“So far, DeMark’s models for time and price just haven’t coincided, so rather than a major top leading to a brutal decline, we kind of get these garden variety pullbacks, maybe 5% to 10% or less, and then the rally gets going again. But now it’s different,” Cramer said. “Now DeMark’s timing and price models are finally in alignment and he thinks we could soon see a significant top in both the S&P 500 and the Nasdaq 100.”

Here are two charts using DeMark’s analysis, with the first one being of the S&P 500.

The second is of the Invesco QQQ Trust, a popular ETF that mirrors the tech-heavy Nasdaq 100.

Both the S&P 500 and the QQQ are on day 12 of DeMarks’ well-known 13-session sequential pattern, according to Cramer.

To reach 13, the S&P 500 needs to go above 4,430 intraday and close above 4,419, Cramer said. It finished Tuesday’s session at 4,423.15.

“That could easily happen tomorrow if the S&P rallies oh-so-slightly in the morning … and then hangs in there for the rest of the day,” Cramer said. “That is a very threatening pattern. … Tomorrow is day 13. It’s pretty much a pivotal session.”

For the QQQ, Cramer said, “that countdown will go to 13 and fire off a sell signal the moment … the QQQ closes above 369 — up a only a few points from here, so we’re really close.” The QQQ ended Tuesday’s trading day at 366.81.

“If the S&P and the Nasdaq-100 both give you these sell signals at roughly the same time, DeMark thinks it could get ugly,” the “Mad Money” host said. “It’s the first time this has been a real possibility since the bottom in March of last year. Of course, if he’s wrong, there’s a chance the S&P and the Nasdaq could both give you a quick two or three day rally in a good-news environment, but right now DeMark thinks a meaningful top is far more likely.”

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Someone, Please Explain the Metaverse to Jim Cramer

Photo: Mark Lennihan (AP)

If you follow tech news, you may have been wondering to yourself—what the hell is a metaverse? That’s fair. But if you are wondering what the metaverse is, please, do not go to Jim Cramer for answers.

You probably know Jim Cramer as the Chipotle-loving man on CNBC who yells about stocks and enthusiastically slams a BUY BUY BUY button. Well, after last week’s Facebook earnings call, Cramer sat with his fellow “Squawk on the Street” cohosts to try and parse what the metaverse actually is and what it means for Facebook. I have watched this roughly four-minute video, and friends, I do not think Jim Cramer knows what the metaverse is.

“You have to go to the Unity conference call first quarter, which really explains what the metaverse is,” Cramer says at the beginning of the video. “Which is the idea that you’re looking at basically, it could be Oculus, whatever, and you say, ‘I like the way that person looks in that shirt, I want to order that shirt,’ ultimately, it’s Nvidia, it’s based on Nvidia. I was at Nvidia with Jensen Wong, what happens… it’s conceivable, OK David, listen to me.”

This is what we call a word salad, but it’s only the beginning of a bizarre journey into what the metaverse is, according to Jim Cramer. It should be noted that immediately after this unintelligible explanation, 38 seconds into this video, cohost David Faber actually reads aloud what Facebook CEO Mark Zuckerberg said the metaverse was. For the record, that definition was “a persistent, synchronous environment where we can be together, which I think is probably going to resemble some kind of a hybrid between the social platforms that we see today, but an environment where you’re embodied in it.”

To which a flustered Cramer says, “He didn’t tell you enough!”

“That tells me what it is,” Faber says in response. “It’s a holodeck. It’s like Star Trek.” To be clear, this is a decent metaphor for what the metaverse is, as described by Zuckerberg. But no. Cramer is not satisfied.

Cramer goes on to describe a scenario where a lonely person goes into a room, sees another person, and asks, “Do you think… do you like the Mozart? Have you listened to Haffner?” Which then somehow involves a second person recommending listening to Beethoven’s 9th symphony before Mozart or Haffner, but that neither of these two people exists and that is the metaverse. Somehow Stravinsky’s Rite of Spring also works its way into this bonkers metaphor. I can’t tell you why or how, even though I have watched this segment multiple times.

The hosts then liken the metaverse to the “tenth iteration of Zoom,” the Terminator, self-driving mobility, AI, and Minority Report. Cramer then again mentions Unity, Facebook’s SDK for building cross-platform games, as a smaller metaverse. For a second, you think Cramer’s back on track and getting somewhere.

And then he says, “It’s like you walk in, and you really like Shakespeare. King Henry IV, part I. You like the speech about the…” At this point, it devolves into gibberish. “I’m just saying that you can have a discussion about Shakespeare with several people. The person to the left does the comedies, the person to the right does the histories, in front of you does the tragedies, and you kick it around.” Somehow, this too, is the metaverse.

At this point, everyone’s realized this whole endeavor is a wash. No one knows what the metaverse is, though Faber got pretty close with his Holodeck comparison. Instead, to save their asses and segue to a new discussion, they start spouting that Mark Zuckerberg is a genius. And then Cramer says, “When you meet Zuckerberg… he’s actually… quite regular!…” To be clear, not when he’s riding a hoverboard with a flag. He’s regular “when you say, ‘How you doin’? I need a LaCroix.”

Before watching this video, I had a pretty good understanding of what a metaverse was. It was, after all, a term first coined in Neal Stephensen’s seminal classic Snow Crash to refer to a collectively shared virtual space. A VR or mixed reality-based version of the internet. You know, something Facebook’s been pitching and gradually working towards with its VR efforts for years now. It’s also a goofy buzzword to describe what we intuitively understand as the ideal use case for these next-gen technologies. But now that I’ve watched this video on loop, I don’t know man. I just don’t know.

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Cramer says it is ‘height of irresponsibility’ to invest in Chinese stocks right now

CNBC’s Jim Cramer on Monday urged viewers to remain cautious on the stocks of Chinese companies, contending there’s too much regulatory risk to comfortably own shares.

“I don’t know how much simpler I can make this. When an explicitly communist government forces for-profit companies to turn into nonprofits, it’s probably not a safe place to invest your money,” the “Mad Money” host said.

Despite some investors beginning to believe Beijing’s intense, multiweek crackdown on companies, such as newly public Didi Global, is cooling, Cramer said he’s not buying it.

“Fool me twice, shame on me,” said Cramer, who has for years been cautious on most Chinese stocks but spoke positively about Didi before the ride-hailing giant’s IPO in late June. Just days later, regulators in China announced a series of actions against the company regarding data and privacy allegations.

Other tech firms also faced heightened scrutiny in recent weeks, leading to steep sell-offs in their stocks. The KraneShares CSI China Internet ETF, known by its ticker KWEB, is down 22.65% in the past month. However, in the past five days, it’s up 3.42%.

“After what they pulled with Didi Global and the tutoring companies, I think it’s the height of irresponsibility to give Chinese stocks a second chance” even if some on Wall Street are warming back up, Cramer said.

“Throughout history, we’ve seen dictatorial regimes take tough actions, then they let the smoke clear and make soothing noises, luring in more suckers who they can rip off,” he added. “That’s where we are now. You can try to play this period of calm … but you never know when they’ll start cracking down again.”

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Jim Cramer: Tesla Stock to $1,000?

Tesla has reported first quarter deliveries of 184,800 vehicles, beating the FactSet analyst consensus estimate of 172,230 vehicles by 7%. Despite Model S and Model X production lines being down as Tesla works to refresh both vehicles, Tesla was able to grow deliveries by 2% sequentially and 109% to last year, setting a new quarterly record.

How will the market react to Tesla’s numbers when the stock starts trading on Monday? So far the reception has been positive.

Shortly after the numbers were released, Jim Cramer responded to a tweet which suggested TSLA stock “should jump to $1,000 soon and hit $1,200 or more in 2022,” by saying it was “aggressive but not out of the ballpark.” Prior to the Q1 report, TSLA closed at a share price of $661.75, -6% year to date.

Gene Munster of Loup Ventures shared his thoughts on Tesla’s report on Twitter — “Impressive number given the headwinds in March related [to] buyers holding off for upcoming EV credits and S&X refresh.”

“We are encouraged by the strong reception of the Model Y in China and are quickly progressing to full production capacity. The new Model S and Model X have also been exceptionally well received, with the new equipment installed and tested in Q1 and we are in the early stages of ramping production,” Tesla noted in the release.

Prior to Friday’s release, analysts were expecting 831,000 deliveries for Tesla on the year, per estimates compiled by the company. With roughly 185,000 delivered in Q1, Tesla will need to deliver 646,000 vehicles over the following three quarters — about 215,000 per quarter — to meet Wall St.’s expectations.

Rumor has it that Tesla has bigger aspirations. Leaked details from a company call suggest Tesla may be targeting 1,000,000 deliveries in 2021.

Pierre Ferragu of New Street Research who is bullish on the stock but expected deliveries to miss consensus noted, “The one thing we probably got wrong: The ramp of Model Y in China and Fremont. Will also help 2Q21 look awesome and get the full year close to 1 million deliveries!”

Expect analysts to continue to weigh in early next week as investors prepare for Tesla’s Q1 earnings report, likely to be scheduled after market close on Wednesday, April 21.

Disclosure: Rob Maurer is long TSLA stock and derivatives.



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Cramer on buying growth stocks after inflation scare shakes up market

CNBC’s Jim Cramer advised that market players have two ways to approach high-flying growth stocks that teetered and tottered their way through a volatile session on Wall Street Tuesday.

Investors can choose to join in on the sell-off that has dropped some tech names like Apple into negative trading territory this year.

The other choice — taking a cue from Federal Reserve Chair Jerome Powell’s restated commitment to leave interest rates at low levels — is to hold on for the ride and consider loading up on worthy stocks discounted from their highs, Cramer said after the market closed mixed.

“After today’s late afternoon rebound, it’s not too late to sell the more egregiously expensive stocks if you want to,” the “Mad Money” host said. “But as for the better growth stocks, down more than 10% from their highs, call me a buyer. Not all at once, not big, but a buyer nonetheless in any retest of that 9:47 a.m. low that we saw today.”

Cramer’s assessment of the current state of the market follows a roller-coaster trading day where major U.S. averages bounced from their session lows. The market suffered a steep sell-off in the morning, with the Nasdaq Composite down almost 4% at its trough, before the blue-chip Dow Jones and benchmark S&P 500 managed to etch out modest gains at the close.

The Dow advanced more than 15 points to 31,537.35 for a 0.05% gain. The S&P 500 finished 0.13% higher at 3,881.37 to end its losing streak at five. The tech-heavy Nasdaq could not muster enough for a positive day, falling 0.5% to 13,465.20, extending Monday’s losses.

“I’m happy to entertain the idea that you need to ring the register here, but I happen to like growth stocks in a reflation scare. I like growth stocks when risk is on. I like growth stocks when risk is off,” Cramer said.

“If you want to hold on to the growth stocks … you have to be prepared to take some pain, just like in late 2015 and early 2016 — that was the last great moment to buy these stocks — or you can just do some selling if you want to and try to swap back in at a lower level,” he added.

The market has toiled through a rotation as investors swap growth and tech stocks that outperformed throughout the pandemic for value plays of companies that are expected to see business return as the economy reopens. The Nasdaq is now 4.5% off its closing high earlier this month.

Worries that an inflation revival could trigger the Fed to raise interest rates, as it did in twice in a three-month span between 2015 and 2016, shook investors out of growth stocks in recent days, Cramer said. Higher rates pose a challenge to growth and utilities stocks.

Share prices in Apple, Salesforce, and ServiceNow are all down at least 3% this week.

During an appearance before Congress Tuesday, however, Powell told lawmakers that inflation remains “soft,” the labor market faces ongoing challenges and that the central bank was committed to its current monetary policy.

That reassured investors about interest rates, helping the market recover some losses.

“This time our Fed chief has vowed to hold off on raising rates — too many unemployed — but there will come a time and a point where these growth stocks will be somewhat hopeless,” Cramer said. “They’ll kind of look like they did today … before people came in to buy.”

Correction: This story has been updated to reflect the correct number of points the Dow advanced by.

Disclosure Cramer’s charitable trust owns shares of Apple and Salesforce.

Disclaimer

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Cramer calls on U.S. to fund plants to address chip shortage, unemployment

CNBC’s Jim Cramer said Wednesday that the United States should fund the development of a chipmaking compound in efforts to address both the nation’s high unemployment rate and a chip shortage that’s affecting American businesses.

More and more companies, including carmakers like Ford and General Motors, have recently sounded the alarm about the global supply of components, leading them to reduce the production of their own products.

Meanwhile, the U.S. labor market with a 6.3% unemployment rate is struggling to gain traction climbing out of the coronavirus-induced recession.

“We need more chips and we need more jobs,” Cramer said on “Mad Money.” “Why not kill two birds with one stone? It’s time for our government to invest in building the biggest and best complex of semiconductor foundries … in the world.”

Automobiles are becoming increasingly more technologized, which requires silicon chips for things like power steering, brake sensors and entertainment devices. The scarcity of supply has forced GM and Ford to shut down factories, delaying delivery of new cars. GM warned the disruption could impact its 2021 goals.

Demand for chips, which are also used in products like televisions, game consoles and computers, has soared during the pandemic as Americans transitioned to remote work and learning environments. Cramer also pinned the blame on globalization, which allowed companies to outsource manufacturing to giants like Taiwan Semiconductor and Samsung Electronics in Asia.

The more connected cars become, the more semiconductors they will require.

“Believe me, you’re going to start hearing about this shortage constantly, daily, because it’s wreaking havoc with all sorts of industries, and making us a much less competitive and perhaps even hostage company. Hostage to a bigger chip customer, the PRC (China). We got to get ahead of this.” Cramer said.

“Our companies can’t get enough chips because there’s not enough production worldwide, and that lack of chips is hurting all sorts of manufacturing,” he added.

He signaled that he is optimistic on Gina Raimondo, the governor of Rhode Island who was nominated by President Joe Biden to lead the U.S. Department of Commerce. Raimondo is a former venture capitalist, giving her an ideal perspective of the business world, Cramer said.

He also said the low-interest-rate environment can be a catalyst to help fund the federal project with bonds.

“America’s best tech industry, the most intellectual property that is anywhere in tech, is in the semiconductor capital equipment space,” Cramer said, pointing to companies like Lam Research, KLA Tenor and Applied Materials who have machines needed for making chips.

“Meanwhile, building gigantic semiconductor foundries can put more people to work than just about any other infrastructure project.”

Disclosure: Cramer’s charitable trust owns shares of Ford.

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