CNBC's Jim Cramer: Confounding Crosscurrents Put Stocks at Risk
Friday, 28 Mar 2014 10:57 AM
By Dan Weil
While the Standard & Poor's 500 Index stands about 1 percent from its record high, Jim Cramer, host of CNBC's Mad Money, sees confusing crosscurrents that may bode ill for stocks.
First, "interest rates are plummeting," he said on the show. "The Fed tells us business is improving, and jobless claims suggest the economy is getting better, yet the yield on Treasurys implies a slowdown or worse." The 10-year Treasury yield stood at 2.7 percent Friday morning, down from 3.03 percent Dec. 31.
Second, mineral and mining stocks are rising. "Typically, lower rates are the kiss of death for this group. Yet mineral and mining stocks are doing very well," Cramer said.
Third, there's an oil stock rally that he doesn't understand. "Is there about to be some sort of embargo somewhere?" Cramer said. "These stocks have been relentlessly rallying on absolutely nothing that we know of."
These things could mean nothing, or they could mean everything, he said. "This market could resolve itself tomorrow. But for the time being, we're in the dark, and investors don't like uncertainty. I'd look for anxious investors to sell into any rip."
Meanwhile, the AAII (American Association of Individual Investors) weekly investor sentiment survey shows enthusiasm is waning for stocks.
For the week ended March 26, a total of 31.2 percent of investors were bullish about stocks for the next six months, down from 36.8 percent a week earlier. Meanwhile, 28.6 percent were bearish, up from 26.1 percent.