Jim Cramer says there’s no fighting the Fed, and many stock-market darlings have become un-investable.
Make no mistake, the Federal Reserve wants to take the air out of our economy, Jim Cramer told his Mad Money viewers Tuesday. That’s great news for inflation and the long-term health of our economy, but it’s also very bad news for the bulls.
There is no fighting the Fed. The Fed always wins. Just look at this former market darlings, all of which have now become uninvestable.
Remember the meme stocks? They were certainly exciting, while they lasted. But now the stocks of GameStop (GME) – Get GameStop Corp. Class A Report, AMC Entertainment (AMC) – Get AMC Entertainment Holdings, Inc. Class A Report, Corsair (CRSR) – Get Corsair Gaming, Inc. Report and Wendy’s (WEN) – Get Wendy’s Company Report have all be cut in half, or worse.
Then there’s housing, where a combination of home price inflation and rising interest rates have created the worst affordability we’ve seen in decades. Home builders and everything that goes into a home is coming down hard.
So too with the banks, which were supposed to prosper from rising rates. But if a recession is looming, those rates can’t offset falling loan volumes.
Software and cloud stocks had fabulous growth, but now no one cares. FAANG (Cramer’s acronym for Facebook/Meta Platforms (FB) – Get Meta Platforms Inc. Class A Report, Amazon (AMZN) – Get Amazon.com, Inc. Report, Apple (AAPL) – Get Apple Inc. Report, Netflix (NFLX) – Get Netflix, Inc. Report and Alphabet (GOOGL) – Get Alphabet Inc. Class A Report officially died this quarter as Netflix single handedly took out the entire streaming sector with horrible numbers.
Add to that semiconductors, e-commerce (yes, we’re looking at you, Amazon), and just about all of last year’s IPOs and SPACs, and it’s clear that the carnage in this stock market runs deep.
What will tomorrow hold? We’ll find out tomorrow when the Fed makes its next decision on interest rates.
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