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Jim Cramer lays out how to play the impending debt ceiling crisis




  • Unrest in bank stocks may feel like a looming “train wreck” for Wall Street, but as long as the debt ceiling crisis is resolved, it won’t destroy the market, Jim Cramer said.
  • “If we’re rallying short-term, I recommend taking some profits and then steeling yourself for the debt ceiling fiasco,” Cramer said.

Unrest in bank stocks may feel like a looming “train wreck”[ads1]; for Wall Street, but as long as the debt ceiling crisis is resolved, it won’t destroy the market, Jim Cramer said Thursday.

“I think we’ll have more chaos like we saw last time this happened in 2011, where the real issue is whether the rating agencies downgrade America’s debt, not what happens in Congress,” Cramer said.

While some experts say we shouldn’t worry about not getting a deal, Cramer said he’s not optimistic — and believes a deal will come in the eleventh hour if it’s reached at all. By then, the market will likely have already fallen, he added.

“So why not wait to buy something? Well, if we clear tomorrow’s jobs report hurdle, then the market will go up,” Cramer said, adding that it would only be tradable because of the likely length of the debt ceiling negotiations. “If we do rally short-term, I recommend taking some profits and then steeling yourself for the debt ceiling fiasco and then you can buy more.”

The debt ceiling crisis is just one of four major obstacles Cramer sees in the market right now.

But if concerns about the debt ceiling are removed, that should pave the way for a much more optimistic market, Cramer said. That could potentially reopen the IPO window and usher in bargains, such as Thursday’s market debut of Johnson & Johnson’s consumer health spinoff, Kenvue. Kenvue’s debut was the largest US IPO since 2021.

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