CNBC’s Jim Cramer on Thursday warned investors against rushing to empty or adjust their portfolios based on movements outside normal US trading hours.
“Don’t worry about what the future is [are] a job. Pay attention to what you want. ” [be] Because the machines erase it.”
The “Mad Money” host previously mocked what he calls “pajama traders” for affecting pre-market sentiment as they trade futures contracts, which are often based on headlines and algorithms. His comments came on Thursday as US stock futures pointed to a positive open at 9:30 AM ET. However, futures contracts fell sharply at one point during the night.
“Why are people so desperate to sell at 1 am? What do they know?” Kramer asked rhetorically. “The answer is nothing.”
The recent stock market volatility comes as Wall Street is closely watching the Federal Reserve, which is in the process of withdrawing some of the very ninth monetary policy support implemented nearly two years ago at the start of the Covid-19 pandemic.
On Wednesday, the US central bank indicated that an interest rate increase is likely to come in March amid already unstable markets and add to inflation. The Dow Jones Industrial Average closed about 15 points around on Wednesday after Jerome Powell’s comments on the January Fed meeting after it had been in the green earlier in the day.
The 30-share Dow rose 0.7% at midday Thursday in the wake of the US fourth-quarter gross domestic product report that beat analysts’ expectations. The S&P 500 rose 0.4%, and the Nasdaq Composite fell 0.1%.
Criticizing again what he calls the headlines we created the bot, Cramer said Thursday that he believes any market hysteria over the Fed’s actions should be taken with a grain of salt because some of the trading actions are being done by algorithmic traders who “do not distinguish between good and bad stocks.” .
“They just sell everything,” Kramer said, urging people to “not pay” for their favorite companies at the moment.
“I think there are a lot of people trying to buy something that is much higher than the sellers are willing to sell, because they do automatically,” Kramer said. Selling programs go beyond buying.
“It doesn’t mean the stock is bad, it just means you have to be a bit wiser and not prove too close.”
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