After months of an endless bull rally where it seemed like stocks could only go up, not down, Cramer was not surprised to see the market’s first tangible decline spark sheer panic.
“I’m not disputing for one moment that today was anything but plum ugly, but let’s put a huge caveat in here. The absolute numbers for this decline may sound big. Hey, there was a time back in 1987 … where a down-500-point day was a crash,” the “Mad Money” host said.
“But here’s the thing: the absolute numbers, they don’t matter. Only the percentages are important,” he said.
When the Dow lost 500 points in 1987, it was a 22 percent decline. But this market’s 666-point nosedive only amounted to a 2.5 percent decline — still “awful,” but not a crash, Cramer said.
“We were due. It’s not the end of the world,” Cramer said. “However, it might be the end of the fairy tale world, which is just as well. People, it has been too easy. It is about to get hard. Not impossible, but a heck of a lot harder than it’s been.”
“A couple of perennial winners, Apple and Alphabet, have been transformed into what can only be called underdogs — maybe even losers — overnight, both stocks more than 4 percent today, while Amazon’s become like the Patriots, with Jeff Bezos acting as the stock market version of Tom Brady,” the “Mad Money” host said.
However, Super Bowl analogies aside, Cramer knew that investors were worried about what Friday’s staggering decline meant for the technology names.
But even with Friday’s weakness, Cramer said most of the negative action stemmed from their quarterly earnings results.
“This is a little more extreme than I thought that [the Fed] might do, demanding that the board change. More importantly, this limit of assets. This stock has been red-hot,” Cramer noted. “I don’t think you could get a worse piece of news for the incredible ETF that had been the financials.”
Shares of Wells Fargo fell over 2 percent in after-hours trading. A cross-selling scandal at the bank made headlines for much of 2017, culminating in a series of fines, downgrades and subsequent unfavorable findings by independent investigators.
In Cramer’s lightning round, he flew through his take on some callers’ favorite stocks:
Kinder Morgan: “I want you to get off the phone and think about how you’re positioning your portfolio, because that’s one of the worst stocks to own in this environment. It’s bad in rising rates. It’s bad where I think oil is. And it’s done a lot of sloppy things. Ix-nay Kinder Morgan.”
Thermo Fisher Scientific: “I think Thermo-Fisher is ideal. The stock has had an unbelievable quarter. The quarter was just monster. Casper’s terrific, but don’t buy it all at once. Why? Because it’s too big a dollar amount and people are selling those stocks.”
Disclosure: Cramer’s charitable trust owns shares of Apple and Alphabet.
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