CNBC’s Jim Cramer says stock market is in ‘a very serious correction’ — and there’s nowhere to hide
By Mark DeCambre
Published: Nov 16, 2018 4:06 p.m. ET
Cramer breaks down the problems in this market.
‘This is a very serious correction’
Jim Cramer
Jim Cramer, CNBC’s “Mad Money” host and a prominent fixture among market commentators, on Monday said the market is enduring “a very serious correction,” underscored by the fact that there are few fundamental reasons for the market’s current downtrend.
During CNBC’s “Halftime Report,” Cramer said notable is a slump in shares of so-called FANG names — the highflying quartet of Facebook Inc. FB, -2.38%, Amazon.com Inc. AMZN, -1.68%, Netflix Inc. NFLX, -6.15% and Google parent Alphabet Inc. GOOGL, -0.67% GOOG, -0.60%, that are among the most influential on Wall Street due to their massive market values and the degree by which investors have piled into those investments for hope of consistent growth.
All of those companies are in a corrective phase, defined as a drop of at least 10% from a recent peak, and Netflix and Facebook shares have shed around a third of their values since hitting 52-week peaks.
Cramer said that the economy is solid and has championed the idea of the Federal Reserve’s pausing, or at least slowing down, its interest-rate-raising initiative to assess current market conditions, aligning himself with President Donald Trump, who has lobbed a number of criticisms at Fed boss Jerome Powell’s plan to normalize interest-rate policy from crisis-era lows. The central bank is slated to lift rates again in December, marking the fourth time it’s done so in 2018.
An environment of rising rates and wobbles elsewhere in global stock markets have made identifying havens difficult, with expectations that rate increases will drive bond yields higher and prices lower. On Monday, the bond market is closed in observance of Veterans Day, with the 10-year Treasury note TMUBMUSD10Y, -0.10% last yielding 3.18%.
The CNBC personality, who co-founded the financial news site TheStreet, is best known for a 2007 verbal screed in which he said of the Fed: “They know nothing!” That was a reference to his view that the Fed was ignoring the severity of the asset bubble whose demise was collapsing global financial markets and the U.S. recession that would ensue.
Monday’s trading action reflected continued concern about the integrity of a market that has attempted to recover from an ugly October. The Dow Jones Industrial Average DJIA, -0.95% lost 602.12 points, or 2.3%, to close at 25,387.18, the S&P 500 SPX, -0.39% ended down 54.79 points, or 2%, at 2,726.22, while the Nasdaq Composite Index COMP, -0.83% closed down 206.03 points, or 2.8%, at 7,200.87.
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CNBC’s Jim Cramer says stock market is in ‘a very serious correction’ — and there’s nowhere to hide
MARK
DECAMBRE
Mark DeCambre is MarketWatch's markets editor. He is based in New York. Follow him on Twitter @mdecambre.
