Investors face the same four obstacles right now
There are four main hurdles all investors must navigate right now, but anyone who does it effectively will see a payoff, Jim Cramer said Tuesday.
“If there was just one hurdle, we’d be fine,” Cramer explained. “But with four of them, everyone suddenly wants to sell in May and go away.”
First, there’s Wednesday’s Fed meeting, which is likely to lead to a quarter-point rate hike — but it’s unclear whether the Fed will slow down its aggressive tightening after that, he said.
There are also upcoming employment figures from the Department of Labor, which must remain stable or come down for the Fed to stop tightening for good, says Cramer. While that may eventually happen, he doesn’t see it happening on Friday.
Then there’s the debt ceiling crisis: Treasury Secretary Janet Yellen told Congress on Monday that the US could default on its debt by early June. Cramer expects the crisis to be resolved in good time, but there could be a hangover for the market in the coming weeks.
Finally, there is Apple, which reports earnings on Thursday. Apple’s stock has moved dramatically, and the quarter will probably have to be amazing for it to continue to move that way, Cramer added.
“Now, all of these issues would be much easier to put to bed if stocks were lower, and that’s what’s happening,” Cramer said. “It’s not a bear market, just an interplay, and you have to realize that these four hedges are a gauntlet, a real gauntlet, that has to be crossed.”