CNBC’s Jim Cramer reviewed reason’s for Thursday’s market pullback, saying there may be some time before Wall Street sees another rally.
“The market’s still too overbought, and we got too hopeful and now reality, with its positives that get rewarded, still, and its negatives that are punished, has set in,” he said. “So the time for big gains may be behind us for a bit as we recharge and shed our Panglossian rose-colored glasses.”
The averages dipped as investors anticipated Federal Reserve Chair Jerome Powell’s Friday remarks at the central bank’s annual conference in Jackson Hole. The S&P 500 dipped 0.87% while the Dow Jones Industrial Average slipped 0.43% and the Nasdaq Composite declined 1.67%. Thursday’s session is a departure from a recent winning streak as the market recovered from a global rout that saw the Dow post its worst day in nearly two years.
Cramer suggested the selling was “exaggerated” because Wall Street has “already baked in the possibility of a September rate cut.” He also wondered whether investors are anticipating a Democratic sweep in November, which he said could lead to a higher corporate tax rate.
He also named companies that might have done well in a more generous market, but have seen their stocks sink even after decent earnings reports, including Snowflake, Williams-Sonoma and BJ’s Wholesale.
“This market’s punishing the weak while rewarding the strong,” he said. “It’s no longer making excuses for poor performance. In some cases, it’s not even embracing good performance after the monster move we’ve had in the last two weeks.”
