On Wednesday, CNBC’s Jim Cramer warned investors that stocks could continue to slide, at least for the foreseeable future.
“I think we have a … period of consolidation, as we shed weak investors. And we certainly weed out those who got angry and made personal mistakes, like buying bitcoin above $20,000 or s ‘fun with meme actions’ he said.
Stocks fell on Wednesday after December retail sales data heightened fears of a recession and investors took profits on gains earlier in the month. The S&P 500 closed at its lowest level since December. 15, and the Nasdaq Composite fell, snapping a seven-day winning streak.
“Right now, the market is operating in one of the most overbought conditions we’ve seen in ages. Over the past two weeks, we’ve simply bounced too far, too fast. It’s not that all be awful,” Cramer said.
He pointed out that while Microsoft said it was laying off 10,000 employees, other industries remained much more resilient. Many companies, including United Airlines recently have reported excellent quarters so far this earnings season, he added.
“Big swathes of the economy are doing very well. The problem is in the technology, as I’ve been telling you for months,” he said.
However, this will not prevent the market from suffering more, at least in the short term, warned Cramer. “The bears – they’ll be out in force tomorrow.”