‘Sell stocks into any rally’
CNBC’s Jim Cramer on Friday warned investors that any upcoming market rallies will be temporary as the Federal Reserve turns up the heat in its fight against inflation.
“Until we see a pattern of higher unemployment, lower consumer spending and lower oil prices, just presume that you need to sell stocks into any rally because the Fed’s going to make sure those rallies are temporary,” the “Mad Money” host said.
“That said, I think the economy has already weakened substantially here, so the pain might be over faster than you’d expect,” he added.
While the S&P 500 and Nasdaq Composite climbed on Friday, all the major indices ended a volatile week of trading in the red, with the S&P recording its worst week since 2020.
“Every time it looks like they’re done selling, they come right back,” said Cramer, who on Thursday recommended that investors hold off on buying until the market settles down.
He also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.
The market is closed due to Juneteenth, a federal holiday commemorating the end of slavery in the confederate states.
- Q2 2022 earnings release before the bell; conference call at 11 a.m. ET
- Projected EPS: $3.95
- Projected revenue: $8.12 billion
Cramer said he wouldn’t be surprised if analysts downgrade the construction company’s stock because the price of houses is so high.
Wednesday: KB Home. Korn Ferry
- Q2 2022 earnings release after the close; conference call at 5 p.m. ET
- Projected EPS: $2.04
- Projected revenue: $1.65 billion
Investors should consider buying some stock of KB Home if Lennar’s stock doesn’t tank, since it might be ready to bottom, Cramer said.
- Q4 2022 earnings release at tbd; conference call at 12 p.m. ET
- Projected EPS: $1.55
- Projected revenue: $680 million
The management consulting firm could shed some insight on whether the Fed’s interest rate hikes are impacting labor, Cramer said.
Thursday: Darden Restaurants, FedEx
- Q4 2022 earnings release before the bell; conference call at 8:30 a.m. ET
- Projected EPS: $2.21
- Projected revenue: $2.54 billion
Cramer said he expects disappointing results from the parent company of Olive Garden and Capital Grille due to food and labor inflation and cash-strapped consumers.
- Q4 2022 earnings release at 4:15 p.m. ET; conference call at 5 p.m. ET
- Projected EPS: $6.87
- Projected revenue: $24.49 billion
While he doesn’t expect a good quarter from FedEx, Cramer said he’s still interested in its take on the state of e-commerce.
- Q1 2023 earnings release before the bell; conference call at 9 a.m. ET
- Projected EPS: $1.55
- Projected revenue: $9.20 billion
CarMax will likely have a decent but mediocre set of numbers due to the car shortage, Cramer predicted.