Not a great setup. There are too many articles and posts about how we’re hyping AI and not having enough substance to justify recent market moves. There’s no doubt that the market, particularly the Nasdaq, has rallied endlessly on what amounts to the same information: Nvidia (NVDA) makes great cards; Adobe (ADBE) leveraging them; the same goes for Meta Platforms (META) but we don’t know how; just like Microsoft (MSFT), Google Alphabet (GOOGL) and, above all, Oracle (ORCL); but don’t forget Broadcom (AVGO) and Marvell (MVRL). It is disturbing, indeed. That’s why I approach this shortened week with a little trepidation. There’s really nothing new that I can see other than Samsara (IOT) and MongoDB (MDB) analyst meetings, both beloved, but both a little abstruse. They can’t move the needle. So, it seems to me that this is test week. Research right now has no hope. If a stock is rising, we get target price increases. If it’s down, we get discounts. Nothing original, nothing against the grain. It’s been a major source of sustenance for a while now, but I think we’ve had enough of it, so maybe that’s causing a hiatus. Regardless, I think we have a break, and we still don’t have a replacement for the AI ​​theme. Are we going to heal after President Joe Biden’s first campaign rally? Become harder. Finances before Federal Deposit Insurance Corporation sanctions? Maybe, and a bunch of regional banks look interesting. Have you seen this multiple of yield and price/earnings ratio on Truist, a very good regional bank? The consumer packaged goods segment has been written off: Campbell’s last quarter (CPB) could be the model. Retail is tough as nails: only Walmart (WMT) and Costco (COST) seem to be doing well. Transportation? You are alone because I think the street is eager to end the spell of the revenge trip. How many times can you recommend cruise ships? Industrialists have been riding on the same thing for weeks now — a possible Chinese stimulus package that hasn’t arrived yet and, perhaps, the Democrats’ infrastructure plan. I’m not going to hide in oil and gas because I’ll be discovered in plain sight. Of course, there’s hyperbole here, and God knows I’m attached to it. Still, I’m worried about this week because for the first time in a while, I think we have to digest seriously. No, I just feel like we’ve gotten to the point where I have more ideas to sell than to buy. When I scan the market, I see many extended charts where, even if I like them, I wouldn’t be comfortable buying them. I’m aware that a stock like Adobe had a huge move in a great quarter, then climbed even higher on the numbers, supercharged by AI. That in itself is quite amazing. But then, out of nowhere, sellers appeared and reversed much of the move. There are real fluff in the band. I see lint in a lot of places, maybe all but the pathetic oils which seem to need an immediate refill from the strategic oil reserve. At times like these, what I like to do is think about what it would take to put some new money to work. We now know the Federal Reserve didn’t raise interest rates last week because the central bank apparently didn’t know what to do – too many disparate people trying to come up with something they couldn’t, so why not report? But as I said, we don’t seem to be able to raise unemployment and slow wage growth. The Fed knows you can’t bring down the stickiest part of inflation — rents — without more layoffs. We have it in tech and now in finance, but not enough for people to leave their homes or move back with their parents. That’s why I think they really play for time. They need to build more houses and they need the builders to lose their discipline. To that I say good luck. But what matters is that I feel like we’ve run out of catalysts to go higher and most stocks just don’t seem to be at levels that would make sense to buy. Why not just wait? It’s difficult for most of us. We will want to jump at the first sign of a price breakout for fear of missing out. Yet this, again, is disturbing. We don’t want to worry about missing out. We want to buy things we want at our prices or otherwise. Are these the prices we want for Microsoft? For Nvidia? So, let’s wait and see. I’m willing to miss a percentage or two, maybe even three, to see if we can get a better basis on our stocks if we want to buy any. Since the market is officially overbought, I think I’ll wait until we have a few down days before pulling the trigger. (Jim Cramer’s Charitable Trust is long NVDA, META, MSFT, GOOGL, COST. See here for a full stock list.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim does a shop. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED BY YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Jim Cramer on Squawk on the Street, June 30, 2022.
Virginia Sherwood | CNBC
Not a great setup. There are too many articles and posts about how we’re hyping AI and not having enough substance to justify recent market moves.
There is no doubt that the market, especially the Nasdaqhas consistently rallied to what amounts to the same information: Nvidia (NVDA) makes great cards; Adobe‘s (ADBE) putting them to good use; so it is Metaplatforms (META) but we do not know how; in the same way Microsoft (MSFT), Alphabet‘s (GOOGL) Google and, more importantly, Oracle (ORCL); but don’t forget Broadcom (AVGO) and Wonder (MVRL).
