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CNBC's Jim Cramer: 'We Are in a Bear Market'

CNBC's Jim Cramer: 'We Are in a Bear Market'

By    |   Friday, 05 February 2016 02:45 PM


CNBC's Jim Cramer was blunt about his opinion of forever volatile stock indexes.

“We are in a bear market,” the "Mad Money" host said on CNBC. But “I don't think there's a recession,” he explained.

A "bear" market is a 20 percent decline from the highs; a "correction" is a 10 percent drop.

However, all the recent economic data just doesn’t seem to please traders, or is enough to pull the market out of an extended funk. “Whatever number comes down is regarded as bad,” Cramer said.

Cramer spoke shortly after the government said employers added 151,000 jobs, a tepid pace by recent standards but still enough to help cut the unemployment rate to a nearly eight-year low of 4.9 percent.

“This is a rolling bear market” when different sectors are savaged by selling on a rotating basis. “We're out of areas where there's genuine growth. This is the sign that the market attacks one area after another after another. Pharmaceutical, then the internet, then back to the industrials, then the banks,” he said.

To be sure, Wall Street extended a sharp selloff in afternoon trading on Friday amid the prospect of a Fed rate hike this year.

Despite the expected slowdown in job growth, the unemployment rate fell to 4.9 percent, the lowest since February 2008, and average hourly earnings increased 0.5 percent, suggesting the labor market recovery remains firm.

"That ... serves as a caution to markets that it is too early to take a Federal Reserve March hike completely off the table," Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California, told Reuters.

Adding to the negative sentiment, technology stocks sold off heavily following weak forecasts from LinkedIn and Tableau Software.

"The market right now seems to be in a spot where the ice is a little bit thin and investors seem to be punishing stocks that are falling out of favor, whether it is caused by direct earnings or guidance," said Gordon Charlop, a managing director at Rosenblatt Securities in New York.

Meanwhile, U.S. manufacturing is shrinking, corporate profits are declining and goods are piling up on warehouse shelves. Those trends have elevated concern that a U.S. recession may loom in the next year or two, the AP reported.

Most analysts say that while the economy may slow this year compared with 2015, an outright recession remains unlikely. Hanson puts the odds of a recession within the next 12 months at 20 percent. While still low, that estimate is up from 15 percent last year.

(Newsmax wire services contributed to this report).

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CNBC's Jim Cramer was blunt about his opinion of forever volatile stock indexes. “We are in a bear market,” the "Mad Money" host said on CNBC. But “I don't think there's a recession,” he explained.
jim cramer, stocks, bear market, investors
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2016-45-05
Friday, 05 February 2016 02:45 PM
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