CNBC’s Jim Cramer detailed a long list of issues Wednesday that he says need to be resolved so the stock market can overcome recent unrest and generate significant momentum.
“Not only do we need a handful of these positives before I can start to feel better about this situation, we need almost all of them. If we get them, the market will skyrocket, but if not, the next ones” The weeks can be so brutal as advertised, “the Mad Money host said.
Cramer has said it is currently “neutral” in the market during what is a historically tough month for stocks. The top three U.S. stock indices are showing in red in September, despite ending higher Wednesday.
Here’s Cramer’s recipe for how market sentiment and stocks can increase significantly:
1. Positive work table
“We need good news on employment. August’s not-so-hot non-farm payroll report has been haunting us since we saw him, right?” Cramer said. “If we can get a large number in a few weeks, we can conclude that the lack of increased unemployment benefits is fixing the labor shortage,” he added, warning that this is not necessarily a “safe thing”.
2. Signs of moderation in inflation
“Any company that is planning its budget for next year has to assume, for once, that perhaps prices will not continue to rise because right now, when it is put paper to paper, they all do,” Cramer said. “At this rate, these companies may not be able to afford to expand,” he added.
3. The shortage of chips should decrease
The shortage of semiconductors has altered for months crucial industries such as cars. However, Cramer said, “until we get more manufacturing capacity, the shortage could continue.”
4. Supply chains need to improve
The Qianwan container terminal of the Shandong Port Group is seen in the Qingdao Free Trade Zone in Qingdao, Shandong Province of East China, on August 7, 2021.
Costfoto | Barcroft Media | Getty Images
Beyond the chip crisis, Cramer said supply chain problems more broadly continue to weigh on market sentiment because they inhibit economic activity.
“The rising cost of oil, the force majeure for the ingredients of the paint, the endless waiting for facilities or washing machines or dryers; these shortages freeze the economy. It must be thawed if the business is to will recover, ”Cramer said.
In relation to this, Cramer said the signs that port congestion is being saved would help the market.
5. Corporate perspectives
When the next round of profit reports is released, Cramer said he wants to see companies that indicate they see “light at the end of the tunnel,” as it refers to supply being able to meet consumer demand. “At first it was a good topic … I don’t cut it anymore,” he said.
Similarly, executives who say they see commodity costs falling would be a positive surprise for Wall Street, according to Cramer.
6. Schools must remain open
“The stock market needs … kindergartens through 12th grade to really open and then stay open,” Cramer said. While acknowledging that there may be Covid-associated risks, he said he simply says it can help the economy because it allows parents to get back to work more easily.
“Do you want to address the labor shortage? … Open schools,” he said.
7. Decrease in Covid hospitalizations
“Maybe this is because employers are starting to require vaccines, maybe the delta variant infects so many people that we finally have an appearance of immunity to the herd,” Cramer said. “A definite decline in hospitalizations could cause this market to be in excess.”
8. Encouraging signs on trips
Travelers are expected to drop off their luggage at the U.S. Airlines counter at Miami International Airport before beginning Labor Day weekend on September 3, 2021 in Miami, Florida.
Joe Raedle | Getty Images
Many investors worry when there is a drop in airline passengers, Cramer said, so an increase in air travel and hotel occupancy rates would also offer positive economic signals.
9. An increase in bond yields
“We want to raise interest rates caused by a stronger economy, not inflation. Don’t be afraid of higher rates; fear rates that go up when the economy is not doing well,” Cramer said.
10. A slowdown in IPOs
Cramer said he just wants high-quality companies to reach public markets, worrying that “all IPO and SPAC offerings flood this market with an oversupply we don’t need.”
11. Increase in share redemptions
“More rewards like Microsoft’s that clear up excess stock offerings and inspire confidence in corporate balance sheets,” Cramer said. The tech giant announced a $ 60 billion repurchase earlier in the day, along with an 11% dividend increase.
12. Less attention to DC and China
Politicians in Washington and Beijing “have to get off the radar screen,” Cramer said. In China, continued control of companies by regulators makes Chinese companies difficult to hold, Cramer said, while in the U.S. discussion about higher capital gains taxes and other policies can be “shake the market.”
“Before you think about raising taxes, they should do something useful like raise the debt ceiling,” Cramer said.