Jim Cramer warns key pillars of the bull market are beginning to crumble
CNBC’s Jim Cramer said Monday that rising risks have made him more cautious about stocks.
“I’m not that optimistic,” the “Mad Money” host said. “My rise can wait. I think there will be a better time to buy than now.”
This warning comes as many pillars of Cramer’s bullish outlook come under pressure. While a surprisingly strong jobs report reduces the likelihood of a Federal Reserve rate cut, the upcoming SpaceX IPO, weakness in Apple and the prospect of additional AI-related fundraising have raised new questions about whether the market can sustain its recent rally.
“Things have changed. For the worse,” Cramer said. “There is a veil over this market and you ignore it at your own peril.”
At the top of Cramer’s list is Friday’s surprisingly strong jobs report, which Cramer said weakens the chances of a rate cut this year.
Cramer said expectations for a rate cut or two are the mainstay of his bullish thesis. Now, he believes the report is “strong enough to suggest that we may need a rate hike to cool the economy, not a rate cut to raise the temperature.”
He also expressed concerns about the upcoming SpaceX IPO. While supply demand appears strong, Cramer warned that an overly enthusiastic run could ultimately backfire if stocks rise to unsustainable levels before falling sharply.
“What happens if we open too high just because there isn’t enough stock to go around, and from then on we watch a sickening decline?” he said. “This could be very bad. Maybe it will affect things very negatively for a while.”
Apple is another concern. Cramer said the company had hoped the Worldwide Developers Conference would act as a catalyst for the stock, but shares fell instead.
“Apple is a leader, maybe the leader, and I don’t want to lose the leader of this stock market,” he said.
Finally, Cramer noted Alphabet’s recent $80 billion equity raise to fund additional AI infrastructure. While he praised the implementation of the proposal, he worried it would encourage other tech companies to take capital from investors, potentially draining liquidity from the broader market.
Taken together, Cramer said the prospect of higher rates, uncertainty around the SpaceX deal, Apple’s struggles and the risk of additional stock offerings make for a much tougher backdrop for stocks.
“So, Fed rate cuts are probably off the table, the SpaceX deal will drain money from the rest of the market, more stock offerings could do the same, and now Apple is due out too. That’s more negativity than I can handle,” he said.
