The market gets rid of “weak-handed investors”
CNBC’s Jim Cramer warned investors Wednesday that stocks could continue to fall — at least for the near future.
“I think we have a … period of consolidation as we get rid of the weak investors. And we certainly wash out those who got carried away and made personal mistakes, like buying bitcoin over $20,000 or dabbling in meme stocks,” he said.
Stocks fell on Wednesday after retail sales data for December raised fears of a recession and investors took profits on gains from earlier this month. The S&P 500 closed at its lowest level since Dec. 15, and the Nasdaq Composite fell, snapping a seven-day winning streak.
“Right now the market is working off one of the most overbought conditions we’ve had in ages. Over the last two weeks, we’ve simply rallied too far, too fast. It’s not that everything is terrible,” Cramer said .
He pointed out that while Microsoft said it was laying off 10,000 employees, other industries have remained much more resilient. Many companies, e.g United Airlines recently reported good quarters so far this earnings season, he added.
“Much of the economy is holding up just fine. The problem is in the technology, as I’ve been telling you for months,” he said.
However, that won’t stop the market from enduring more pain, at least in the short term, Cramer warned. “The bears – they’ll be out in full force tomorrow.”
