Jim Cramer lists 12 ways for stocks to shake off September struggles
CNBC’s Jim Cramer on Wednesday detailed a long list of problems that he believes need resolution in order for the stock market to overcome its recent malaise and build meaningful momentum.
“We don’t just need a handful of these positives before I can start feeling better about this situation, we need almost all of them. If we get them, the market will soar, but if we don’t, then the next few weeks could be as brutal as advertised,” the “Mad Money” host said.
Cramer has said he’s currently “neutral” on the market during what is a historically tough month for equities. All three major U.S. stock indexes are in the red for September, despite finishing higher Wednesday.
Here’s Cramer’s recipe for how market sentiment and stocks can go meaningfully higher:
1. Positive jobs picture
“We need some good news on the employment front. August’s not-so-hot nonfarm payroll report has dogged us ever since we saw it, hasn’t it?” Cramer said. “If we can get a big number in a few weeks, then we can conclude the lack of expanded unemployment benefits is solving the labor shortage,” he added, while cautioning that’s not necessarily a “sure thing.”
2. Signs of inflation moderation
“Any business that’s planning its budget for next year has to assume, for once, that maybe prices won’t keep rising because right now when you put pen to paper, they all do,” Cramer said. “At this rate, those businesses might not be able to afford to expand,” he added.
3. Chip shortage must wane
A shortage in semiconductors has disrupted crucial industries such as autos for months. However, Cramer said, “until we get more manufacturing capacity, the shortages could continue.”
4. Supply chains need to improve
The Qianwan container terminal of Shandong Port Group is seen at Qingdao Free Trade Zone in Qingdao, East China’s Shandong Province, Aug. 7, 2021.
Costfoto | Barcroft Media | Getty Images
Beyond the chip crunch, Cramer said problems to supply chains more broadly continue to weigh on market sentiment because they’re inhibiting economic activity.
“The rising cost of oil, the force majeure for paint ingredients, the endless wait for fixtures or washers or dryers; these shortages are freezing the economy. It needs to thaw if business is going to pick up,” Cramer said.
Relatedly, Cramer said signs that congestion at ports is easing would help the market.
5. Corporate outlook
When the next round of earnings reports is released, Cramer said he wants to see companies indicating they’re seeing “light at the end of the tunnel” as it relates to supply being able to meet consumer demand. “It was a good issue at first. … It doesn’t cut it anymore,” he said.
Similarly, executives saying they see raw materials costs retreating would be a positive surprise for Wall Street, according to Cramer.
6. Schools must stay open
“The stock market needs … kindergarten through 12th-grade schools to actually open and then stay open,” Cramer said. While he acknowledged there may be Covid risks associated with that, he said he’s…
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