Jim Cramer: Embrace the Fed’s Friendship, But Watch Out for Disappointing iPhone Sales
CNBC’s Jim Cramer believes the market is headed in a positive direction as the Federal Reserve begins its interest rate easing cycle. "We’re in a rate cut cycle now, ok, it’s very different from, from the last couple years. So, the backdrop is now friendly. Don’t treat it with hostility, please," he said. "When the Fed wants to be your friend, the best way to try to make money is by embracing the Fed’s friendship." However, Cramer also cautions investors to be aware of potential bumps in the road, particularly from disappointing sales of Apple’s new iPhone. He emphasizes his "own it, don’t trade it" mantra for Apple shares.
Key Takeaways:
- The Fed’s shift to easing rates creates a positive market environment, according to Cramer. This signifies a major shift in monetary policy compared to the past few years, prompting investors to embrace the change.
- Initial iPhone 16 sales data is expected to be released on Monday, and some analysts predict weaker-than-expected results. This could have a significant impact on Apple’s stock and contribute to market volatility.
- Several key economic indicators and company earnings reports scheduled for next week will provide insight into the health of various sectors. These reports will offer crucial information about the housing market, the state of small businesses, and the overall inflationary environment.
A Week Packed with Market Movers
Cramer outlines the key events to watch in the upcoming week that could significantly influence the market.
Monday: Fed Speakers and iPhone Sales
- Speeches by Atlanta Fed President Raphael Bostic and Chicago Fed President Austan Goolsbee could provide more information about the reasoning behind the recent 50 basis point rate cut. While the Fed has signaled its easing intentions, the precise motivations for this decision remain a subject of speculation for investors.
- Early data regarding sales of Apple’s new iPhone will be released, and some analysts are predicting soft numbers. This could create significant volatility for Apple’s stock, especially given the global economic slowdown.
Tuesday: KB Home and Hewlett Packard
- KB Home, a leading homebuilder, will release its earnings report. Cramer sees this as an opportunity to gauge the state of the housing market, which he considers a key indicator of the inflationary environment. Despite the economic challenges, he predicts a brighter future for KB Home in 2025 due to the Fed’s rate cuts.
- Hewlett Packard will unveil its new artificial intelligence-enabled technologies. This could generate interest among investors and highlight the company’s advancements in the rapidly growing field of AI.
Wednesday: Micron, Cintas, and Small Business Insights
- Micron, a leading semiconductor company, will report its earnings, which could provide insight into the state of the tech sector. Cramer notes the recent decline in Micron’s stock and considers it a potential buying opportunity.
- Cintas, a supplier of uniforms and other materials to businesses, is also scheduled to report earnings. Cintas’ performance could shed light on the health of small businesses, which hold a prominent position within the economy.
Thursday: Costco and Consumer Spending
- Costco, a major retail grocery giant, will publish its earnings report. Cramer will closely watch the company’s performance and pay particular attention to the sales trends of specific products. He believes Costco is poised for continued success.
Friday: Personal Consumption Expenditures Price Index
- The Commerce Department will release the Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred inflation measure. Cramer anticipates that these figures will generate renewed speculation on Wall Street regarding the future course of interest rate adjustments. The PCE data will play a crucial role in shaping investor expectations for upcoming rate decisions.
Navigating the Market Amidst Uncertainty
The coming week presents numerous opportunities for investors to gain valuable insights into the market. Cramer advises investors to remain vigilant and pay close attention to the economic indicators and company performance reports that will be released. He encourages investors to embrace the positive market backdrop created by the Fed’s easing cycle but to exercise caution and be prepared for potential volatility.
With the Fed’s intention to lower rates, Cramer believes the market is generally positive. This creates an opportunity for investors to potentially benefit from a more favorable environment. However, he remains mindful of potential challenges, such as the possible disappointment from iPhone sales. By staying informed and remaining strategically invested, investors can navigate this ever-changing market successfully.
