Jim Cramer tells investors to ‘bow down to the Fed’ and beware of false market optimism

Jim Cramer tells investors to ‘bow down to the Fed’ and beware of false market optimism


CNBC’s Jim Cramer on Tuesday warned investors against buying unprofitable stocks due to unwarranted optimism about the stock market.

“While I appreciate hope as a mindset, I’m not as confident as a lot of the buyers who are paying up. … We are seeing a level of enthusiasm here that to me feels unjustified. We shouldn’t be going back to a mentality where we like all stocks because so many of them will miss their numbers and still others will hit us with negative forecasts,” the “Mad Money” host said.

“Right now, we need to bow down to the Fed and the forces of inflation. Anything that brings down inflation, including tough statements from [Fed Chair] Jay Powell, will make big institutional money managers more likely to buy stocks rather than sell them. For the moment, that’s what controls the stock market,” added Cramer, who defended Powell against critics on Monday.

Cramer’s comments come a day after the Fed Chair Jerome Powell vowed to take aggressive action against inflation, including possibly implementing half-basis point interest increases, a week after instituting the first rate hike in over three years.

A company that has high stock prices won’t necessarily stay that way in a volatile market, even if it is performing well, Cramer said.

“There are periods, extreme periods, where the economy gets so out of whack that the stock market itself becomes a pariah asset class, a source of funds for other asset classes, so an individual company’s merits simply won’t be reflected in its share price,” Cramer said.

Cramer, who has touted a strategy of investing in profitable companies for months, also advised investors to refrain from picking up uninvestable stocks like floundering IPOs and SPACs.

“Tons of those stocks just aren’t worth much, regardless of whether Powell steers us into a soft landing or a hard landing,” he said.



Source

Why it’s getting even harder to get into airport lounges now
Business

Why it’s getting even harder to get into airport lounges now

Bloomberg | Bloomberg | Getty Images Airplane tickets are getting cheaper, but it’s getting more expensive to bring your family to an airport lounge. Capital One is the latest company to limit access to booming airport lounges to combat overcrowding. Starting Feb. 1, Venture X and Venture X Business cardholders will no longer be able […]

Read More
Slate Auto: Inside the EV startup, stealth production facility backed by Jeff Bezos
Business

Slate Auto: Inside the EV startup, stealth production facility backed by Jeff Bezos

Slate Auto electric vehicles inside the startup’s beta production facility in Lake Orion Township, Michigan. Slate Auto LAKE ORION TOWNSHIP, Mich. — In a nondescript supplier park in suburban Detroit, an electric vehicle startup backed by Amazon founder Jeff Bezos is building what it hopes will be America’s newest automaker. The facility is filled with […]

Read More
Used vehicle prices ease from tariff fear-buying highs but remain elevated
Business

Used vehicle prices ease from tariff fear-buying highs but remain elevated

A Ford mustang is seen at a used car dealership in Montebello, California on May 5, 2025. Frederic J. Brown | AFP | Getty Images DETROIT — Used vehicle prices last month eased from their recent high in April as consumers who may have needed a vehicle but feared price hikes due to tariffs flocked […]

Read More