James Cramer, the star stock picker on CNBC, says he can’t turn bullish on U.S. stocks yet, thanks largely to the weakness of economies overseas.
“Don’t I want to be like Warren Buffett, who has said repeatedly that he’s a huge buyer of U.S. stocks?” Cramer asked rhetorically on his “Mad Money” show.
“If I’m going to say ‘buy,’ I need something to buy first — companies that will do better next year than this year,” he points out.
U.S. companies depend on four sources for strength, and all four now are sagging in unison, Cramer says.
“The first is you the consumer,” he says. “And you aren’t spending.”
Second is the auto industry, which is getting hammered. And third is the housing market, where Cramer sees another 25 percent price decline before recovery.
“Finally, there are the rest of the world’s economies,” he says.
“This is what I was banking on” for a stock rebound before the Dow Jones Industrial Average tumbled nearly 1,000 points Wednesday and Thursday, Cramer says.
“Over the last decade, there has been a radical shift, where our best companies do business not here, but in Asia, Latin America, Europe and the Mideast,” Cramer says.
Until those countries cut interest rates further, the prospects for U.S. companies are bleak, he argues.
Cramer mirrors much of the market’s sentiment.
“People are stepping to the sidelines, saying, ‘I just don’t want to be part of this now,’” Randy Cass of First Coverage research firm told The New York Times.
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