In times where the global economy fluctuates due to market variations and political decisions by the Fed, recent advice from Jim Cramer, the personality behind the famous CNBC program “Mad Money”, caught the attention of many investors. According to Cramer, it may be prudent to wait for a rise in interest rates before making significant moves in the stock market.
At the time of publication, the S&P 500 Futures was quoted at 4,186.00, down 0.56% in the last 24 hours.
The well-known analyst highlighted that by expecting a rise in interest rates, a subsequent sell-off is likely to occur, reducing the value of shares. This would be the perfect window for investors to make their purchases. In his words, the scenario would be conducive to waiting for this movement and only then, when it falls, enter the stock market.
When examining the performance of corporate giants such as Coca-Cola, 3M, General Electric and Verizon, it was noted that, except for GE, there was some hesitation in the market ahead of their financial reports. However, after the release of its earnings, its shares rose. Jim Cramer interpreted this phenomenon as a result of investors’ low expectations. He was emphatic that it may not be advantageous to take the risk of making moves based solely on quarterly forecasts, especially when those forecasts are influenced by S&P 500 futures contracts.
Complementing this panorama, Jerome Powell, president of the Federal Reserve, made an appearance on Bloomberg TV’s “Wall Street Week” program. In a discussion with presenter David Westin, Powell spoke about the robustness of the North American economy and the role of monetary policy in this context. He indicated that the current rise in bond rates could influence the Federal Reserve’s decision regarding the continued increase in interest rates.
Powell was clear in saying that current monetary policy does not appear to be excessively restrictive. He reinforced that the Federal Reserve’s main objective is to keep inflation stable and controlled, even if such measures are not popular in the economic scenario.
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