Jim Cramer, host of CNBC’s Mad Money, says the stock market rally will peter out before the Dow Jones Industrial Average breaks 10,000.
While the underlying economic fundamentals are strong, much of that is already priced into the market, he says. The Dow has soared 44 percent from its March low, trading at 9,531 Thursday afternoon.
“As we get closer to Dow 10,000, a level that I don’t think we’ll breech, I just can’t like the market as much as I do at Dow 9,000,” Cramer said on his show.
The only way the Dow will surpass 10,000 is if “we get all sorts of positive new information.”
To be sure, Cramer isn’t a bear. The market has a 3 to 5 percent correction in store, rather than a plunge, he maintains.
The reason for that view is the economy’s strength, Cramer says. “I see many, many good things happening.”
One of them is housing. “I’ve never seen housing numbers like this that are so good, courtesy of low rates and affordability” he says.
In addition, he says, consumer confidence is rising, and inflation is under control.
Some experts are more bearish than Cramer.
“There are good reasons to be suspicious about the strength of the recovery,” Ralph Shive, manager of the Wasatch-1st Source Income Equity Fund, tells Bloomberg.
“We could pull back a bunch after the kind of rally we had.”
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