Jim Cramer says stock prices may be retreating because the economy may already be self-correcting.
The stock market is pricing in a ton of negativity right now, Jim Cramer told his Mad Money viewers Thursday, and it’s doing it a lot faster than you’d think. And when the negativity is done, investors need to be prepared for a big rally.
Today capped off the worst quarter for the stock market since March of 2020, right at the onset of the pandemic. Back then, everyone was positive that Covid lockdowns would send us into recession, which led companies everywhere to cut back on their orders.
But, as it turns out, everyone was wrong. Dead wrong. Companies shouldn’t have been hitting the brakes, they should have been shifting into overdrive and ordering more, lots more.
Why? Because Covid created a fundamental shift in our economy, ushering in the remote work revolution. That revolution led to the need for more technology, more home offices, more homes in general, new cars and even new places to live. People flocked from the cities to the suburbs, fixed up their homes, quit their jobs, retired early, and countless other things that no one predicted.
Flash forward two years and we may be over the hump, with supply chains finally catching up and prices, hopefully, poised to head lower. We’re beginning to see home prices plateau and autos return to dealer showrooms. In fact, we could suddenly find ourselves with too much of everything.
That’s why stock prices are retreating. Between the Federal Reserve raising interest rates, Russia’s war with Ukraine crimping oil supplies, and two years of a pandemic, our economy may already be self-correcting. We just don’t know it yet.
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