CNBC’s Jim Cramer on Monday said that Monday’s rally won’t last because none of the headwinds to the economy have abated.
Stocks rebounded on Monday after an ugly end to the month and quarter on Friday, notching the best day since June for the Dow Jones Industrial Average and the S&P 500′s best day since July.
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Cramer pointed out that the market has seen some sporadic one-day rallies recently, but they’ve always been felled by three things. Wednesday’s rally will likely face a similar fate, he added.
Here are three things preventing the market from having a sustained rally, according to Cramer
- Russia’s invasion of Ukraine is ongoing. Cramer pointed out that the two countries are still at war, and that it’s looking likely that the energy crisis it’s fueling could have serious consequences during the winter months.
- China’s still under Covid lockdown. While tech stocks rallied on Monday, many of them are dependent on China, which is still beholden to Covid lockdowns with no end in sight.
- Inflation driven by work-from-home is still up. Wage, food and housing prices are still too high, Cramer said, adding that he doesn’t have high expectations for the release of the nonfarm labor report Friday.
He also said that the market is still incredibly oversold.
“The most impressive thing about today’s rally is that it happened at all. My feeling is that today’s bounce is all about sentiment getting too negative,” he said.
