CNBC’s Jim Cramer on Tuesday said that the S&P 500 is at a critical moment that could send it higher or cut its upward trajectory short.
“The charts, as interpreted by Carolyn Boroden, suggest that the S&P 500 could be due for some near-term turbulence if it can’t break out above last week’s highs,” he said.
The S&P 500 and Nasdaq Composite closed down on Tuesday while the Dow Jones Industrial Average inched up slightly, with stocks struggling to rebound from the previous day’s losses driven by protests against Covid restrictions in China.
To explain Boroden’s analysis, Cramer examined the daily chart of the S&P 500.
The technical analyst sees the index approaching an important hurdle that could pose a real problem for its ability to continue gaining, according to Cramer.
More specifically, the S&P 500’s recent run from the mid-October lows is similar in scale to its rally from late 2021 through early January 2022, he explained. When the rally that started late last year peaked on Jan. 4, the index saw a “nightmare” 1327-point decline into last month’s lows.
“She’s not saying that the rally’s toast. But Boroden says the S&P needs to clear this hurdle — it needs to break out above last week’s high,” he said, adding, “In short, she sees this as a make-or-break moment for the S&P 500, at least in the near-term.”
For more analysis, watch Cramer’s full explanation below.
Jim Cramer’s Guide to Investing
Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.
ZURICH, Oct 27 (Reuters) – Credit Suisse plans to raise 4 billion Swiss francs ($4 billion) from investors, cut thousands of jobs and shift its focus from investment banking towards its rich clients, as the bank attempts to put years of scandals behind it.
The Swiss lender outlined on Thursday what its chairman Axel Lehmann dubbed a “blueprint for success”, after it racked up an unexpected 4 billion Swiss franc loss in the third quarter of the year.
The announcement followed torrid weeks for the bank and fell flat with investors. Its stock, which has plumbed record lows in recent weeks, dropped about 14 percent in early trading, valuing the embattled bank around 11 billion francs.
Credit Suisse said clients pulled funds in recent weeks at a pace that saw the lender breach some regulatory requirements for liquidity, underscoring the impact on its business of wild market swings and a social media storm.
The group added that it was stable throughout.
Analysts gave the announcement a lukewarm welcome. Vontobel’s Andreas Venditti said the bank was embarking on a “lengthy process to restore credibility”.
“Resolute execution and no further missteps will be key and it will take time until results will begin to show,” he said.
The turnaround plan has many elements, from cutting jobs to refocusing on banking for the wealthy.
It will cut 2,700 jobs or 5% of its workforce by the end of this year, and ultimately reduce its workforce by roughly 9,000 to about 43,000 by the end of 2025.
The Swiss bank said it also aims to separate out its investment bank to create CS First Boston, focused on advisory work such as mergers and acquisitions and arranging deals on capital markets.
The bank envisions selling a stake but keeping roughly 50% in the new business, said one person familiar with the issue. It is also exploring the possibility of an initial public offering, another source familiar with the matter said.
Saudi National Bank, majority-owned by the government of Saudi Arabia, said it will invest up to 1.5 billion francs in Credit Suisse to take a stake of up to 9.9% and may invest in the investment bank.
The move bolsters Saudi influence in one of Switzerland’s best-known banks. Olayan Group, one of the biggest Saudi family-owned conglomerates, with a multibillion dollar investment portfolio, also owns a 5% stake in the bank.
The Qatar Investment Authority – which owns about 5% of the Swiss bank – declined to comment on whether it plans to buy any shares.
Credit Suisse said it will create a capital release unit to wind down non-strategic, higher-risk businesses, while announcing plans to sell a large part of its securitised products business to an investor group led by Apollo.
The bank will also wind down some trading businesses in emerging markets and equities.
Its heavy loss in the third quarter was due in large part to write-offs linked to its investment banking overhaul, including adjustments for lost tax credits.
JPMorgan analysts said that “question marks remain” over the restructuring of investment banking, adding that the share sale would also weigh on the stock.
The latest revamp, aiming to overcome the bank’s worst crisis in its history, is the third attempt in recent years by successive CEOs to turn the group around.
Reuters Graphics Reuters Graphics
Once a symbol for Swiss reliability, the bank’s reputation has been tarnished by a series of scandals, including an unprecedented prosecution at home involving laundering money for a criminal gang.
The bank had been rushing to raise money and free up capital by selling assets, keen to limit how much cash it would have to raise from investors to fund its overhaul, handle its legacy litigation costs and retain a cushion for rough markets ahead.
Credit Suisse needs to revamp after a series of costly and morale-sapping blunders that triggered a wholesale change of management.
In refocusing away from risky investment banking to banking for the globe’s rich, Credit Suisse is following in the footsteps of its bigger Swiss rival, UBS.
The UBS turnaround succeeded in large part because of a flood of freshly printed money from the world’s central banks to reignite the economy during the financial crisis.
Credit Suisse, on the other hand, is attempting to refocus its business in a world facing war, an energy crisis, rocketing inflation and an economic slide.
Last year, the bank took a $5.5 billion loss from the unravelling of U.S. investment firm Archegos and had to freeze $10 billion worth of supply chain finance funds linked to insolvent British financier Greensill, highlighting risk-management failings.
Its deepening problems even put it on the radar of day traders earlier this month, when a frenzy of wild speculation about its health sent its stock price into a tailspin to a record low.
($1 = 0.9858 Swiss francs)
Additional reporting by Michael Shields in Zurich and Yousef Saba in Dubai; Writing by John O’Donnell; Editing by Edmund Klamann
Our Standards: The Thomson Reuters Trust Principles.
The meeting of the NATO-Russia Council (NRC) comes as the two sides are stuck in deadlock, with fears mounting that Russia could launch an invasion into Ukraine.
Moscow has dismissed such claims. However, Russia has been amassing as many as 100,000 troops near the Ukrainian frontier, and on the eve of the talks, the military began live-fire drills in regions close to the border.
The United States, NATO and their allies are pushing Russia to de-escalate the situation. Moscow has demanded security guarantees from the US and NATO, including a binding pledge that NATO won’t expand further east and will not allow Ukraine to join the military alliance — something NATO is not willing to do.
“At this point, let me be very, very clear — no one is suggesting that we alter NATO policy on enlargement,” US Ambassador to NATO Julianne Smith told CNN on Tuesday.
Rather than being framed as a bilateral NATO-Russia meeting, Wednesday’s gathering will see each of NATO’s 30 member states and Russia represented equally, in a forum of 31. The meeting is the second of three key engagements between the West and Russia this week.
On Monday, representatives from the US and Russia sat down in Geneva for more than seven hours of discussions.
The marathon talks, which the White House described as “frank and forthright,” did not produce a breakthrough. Another round of talks between Russia and the Organization for Security and Co-operation in Europe (OSCE) — of which the US is a member — are scheduled in Vienna on Thursday.
Ukraine said Tuesday that it was confident that the US and other NATO countries would not make a decision “on the fate” of the country “behind our backs” during the meetings.
CNN’s Veronica Stracqualursi, Jennifer Hansler, Luke McGee, Katharina Krebs, Nikki Carvajal and Alex Marquardt contributed reporting.
Charts suggest shares of Amazon are approaching a make-or-break trading moment, CNBC’s Jim Cramer said Tuesday, citing the view of technical analyst Carolyn Boroden.
The “Mad Money” host said Boroden believes if the stock can hold above its recent low set on Dec. 3, then it will be primed to resume its long-term move higher. However, if Amazon shares end up falling below that support level, Boroden thinks it could “get worse,” Cramer said.
Amazon’s stock, which is down 4% over the past month, has not yet flashed a buy signal in Boroden’s eyes, Cramer said. But she was encouraged by what she saw earlier this month, when a batch of Fibonacci timing cycles appeared on Amazon’s chart, Cramer said.
Boroden is an expert on Fibonacci strategy, which is used by technical analysts and traces its roots to the numerical sequence identified in the 13th century by the Italian mathematician Leonardo Fibonacci.
Carolyn Boroden’s technical analysis focused on Amazon shares.
Mad Money with Jim Cramer
“Whenever [Boroden] gets a cluster of these things, it’s often a sign that a stock is about to change course, which is exactly what happened to Amazon,” Cramer said.
“Boroden wants to see Amazon do something else before she’s willing to go bullish. She’s looking for a buy trigger, and her favorite buy trigger involves a particular moving average crossover,” Cramer explained.
Specifically, he said, Borodon likes to analyze the 30-minute trading chart for a stock and wait for the eight-period exponential moving average to cross above the 34-period exponential moving average. When that happens, it’s a sign a stock’s momentum has turned positive.
Stock picks and investing trends from CNBC Pro:
“Unfortunately, we still aren’t there yet, but her Fibonacci timing cycles suggest that the stock could potentially bottom sometime in the next couple of days — possibly it already did earlier today,” Cramer said.
If that happens and Boroden is able to give a full endorsement of Amazon, Cramer said, the technician believes the stock could rally just below $3,900 per share. It closed Tuesday’s session down 0.28% at $3,381.83.
“If the stock fails to hold its support — meaning if it closes down more than a few points below where it’s currently trading — then it does ruin the whole bull thesis,” Cramer said. “In fact, if Amazon pulls back a bit more from these levels, Boroden says you need to expect substantially more downside.”
Still, Cramer advised viewers that he’s personally not expecting Amazon to fall significantly. He also noted his charitable investment trust owns Amazon.
Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclosure: Cramer’s charitable trust owns shares of Amazon.
