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Charts suggest it’s ‘way too early’ to expect the stock market to rebound, Jim Cramer says

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CNBC’s Jim Cramer on Friday warned investors that the stock market is unlikely to recover anytime soon.

“The charts, as interpreted by Mark Sebastian … suggest that this market’s got more downside and it’s way too early to go really bullish,” he said. 

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“Unlike him, I also believe we could get a sharp spike up, but, for our Charitable Trust, if that happens we’re going to have to do some selling,” he added.

The S&P 500 closed out its worst month since March 2020 on Friday. The Dow Jones Industrial Average tumbled 8.8% for the month, while the Nasdaq Composite dropped 10.5%.

Before getting into Sebastian’s analysis, Cramer first explained that when the S&P 500 goes lower, the CBOE Volatility Index, also known as the VIX or fear gauge, typically moves higher. And when the S&P moves higher, the VIX typically goes lower. 

He then examined a pair of charts showing the daily action in the S&P and the VIX:

While the S&P and VIX moved at the same pace in June, things took a turn in August. Sebastian notes that when the S&P started falling in late August, the VIX had a “slow-rolling rally” instead of roaring like it typically would, according to Cramer.

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This mismatch in movement between the S&P and VIX’s movements continued through early September but only really exploded this week, Cramer said, adding that the market still is a long way from recovering.

“Sebastian’s waiting for the S&P to go down while the VIX also goes down — that’s a classic tell that a sell-off’s coming to an end,” he said. “That is not happening right now.”

For more analysis, watch Cramer’s full explanation below.

Jim Cramer’s Guide to Investing

Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.



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Cramer’s lightning round: AGNC Investment is not a buy

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Paramount Global: “Too cheap to believe. … I don’t know where it bottoms, but it sure isn’t close to the top.”

Hasbro Inc: “I don’t like the earnings, and I think that Mattel‘s actually cheaper.”

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Citigroup Inc: “The book value is so different from where the common stock is, the price. Something is very wrong there.”

Cramer's lightning round: AGNC Investment is not a buy

Jim Cramer’s Guide to Investing

Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.



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Jim Cramer says not to fear bearish economic talk from bank CEOs – there’s no ‘financial apocalypse’

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Jim Cramer says not to fear bearish economic talk from bank CEOs
CNBC’s Jim Cramer on Wednesday told investors that they should take gloomy economic commentary from bank executives with a grain of salt. 

“Don’t panic the next time you hear one of these bank CEOs say something terrifying — they don’t know the impact of their words,” he said, adding, “Sure, we’ve got plenty of problems, but they’re not financial apocalypse problems.”

The S&P 500 slipped for a fifth trading session on Wednesday as investors mulled the possibility of a recession.

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Adding to investors’ worries, JPMorgan Chase CEO Jamie Dimon said on Tuesday that inflation is eating away at consumers’ pocketbooks and could create a recession. 

The chief executives of Bank of America and Wells Fargo also warned that the economy is slowing down as Americans cut back on spending.

“Memo to America’s bankers: Don’t try to frighten us. Don’t try to get us to sell everything,” Cramer said. “Don’t be Grinches telling us a hurricane could be coming.”

He urged the chief executives to remind investors of what’s going right in the Fed’s fight against inflation, and gave an example of what he believes one of the CEOs should have said: 

“There will come a day when the Fed will be done tightening, although that may be when the S&P 500 is a good bit lower. But I don’t know if I want to take the chance of possibly missing the [next] big rally. Hey, maybe buy small,” he said.

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Disclaimer: Cramer’s Charitable Trust owns shares of Wells Fargo.

Watch Jim Cramer's message to U.S. bank leaders

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Mortgage demand falls again even as rates sink further

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A “For Sale” sign in front of a home in Sacramento, California, on Monday, Dec. 5, 2022.

David Paul Morris | Bloomberg | Getty Images

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Lower mortgage rates are pulling some current homeowners back to the refinance market, but not enough to offset the drop in demand from homebuyers.

Mortgage application volume fell 1.9% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 6.41% from 6.49%, with points decreasing to 0.63 from 0.68 (including the origination fee) for loans with a 20% down payment. That is 73 basis points lower than it was a month ago but still more than three full percentage points higher than it was a year ago.

Applications to refinance a home loan rose 5% for the week but were still 86% lower than the same week one year ago. There are still precious few current borrowers who can benefit from a refinance at today’s higher interest rates. The refinance share of mortgage activity increased to 28.7% of total applications from 26.1% the previous week.

Housing has a fair amount of room to fall, says Morgan Stanley's Egan

Mortgage applications to purchase a home fell 3% for the week and were 40% lower than the same week one year ago.

“Purchase activity slowed last week, with a drop in conventional purchase applications partially offset by an increase in FHA and USDA loan applications,” noted Joel Kan, an MBA economist in a release.

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The average loan size for homebuyer applications decreased to $387,300 — its lowest level since January 2021, which is consistent with slightly stronger government applications and a rapidly cooling home-price environment, according to Kan.

Mortgage rates haven’t moved much this week, with no significant economic news making headlines. The next big shift will likely come next week, with the much-anticipated monthly read on inflation.



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