CNBC’s Jim Cramer on Thursday predicted that Wall Street will price in a bottom soon and the market will be set for a “tremendous rally.”
“Suddenly, the conventional wisdom says there’s too much of everything, so prices are going to come down. Stock prices are anticipating that. And that’s why the only sectors that sustained rallies in the first quarter were the oils, because they’ve cut back, and the utilities, which really act well only when there’s going to be a heavy recession,” the “Mad Money” host said.
“We price in this negativity far more quickly than you’d think. Maybe it takes a month, maybe only a few weeks. But it will happen and once it does, we’ll be poised for one incredible, tremendous rally,” he later added.
The Dow Jones Industrial Average dropped 1.56% on Thursday, the last trading day of March. The S&P 500 declined 1.57% while the Nasdaq Composite slipped 1.54%. The Dow finished the quarter down 4.6%, the S&P 500 lost 4.9% and the Nasdaq dropped 9%.
“While we still have an inflation problem, today’s action is predicting a crash in sales for pretty much everything. … I say, for now, just let it keep coming down. Accept that there will be plenty of stories about, say, how AMD will have too many chips, or GM too many cars, Lennar too many homes, Home Depot too much inventory,” Cramer said, listing some of the companies whose stocks slid during Thursday’s session.
“The [Federal Reserve] will definitely raise interest rates, maybe many times, declines will accelerate and inflation will definitely be tamed. Most importantly, the market will have anticipated all of this and will bottom well ahead of everything I’ve just described,” he added.
Disclosure: Cramer’s Charitable Trust owns shares of AMD.
