Tags: jim cramer | investors | trap

Jim Cramer Warns Investors: 'Everything Seems Like a Trap Now'

(Dollar Photo Club)

By    |   Monday, 19 August 2019 03:16 PM

CNBC’s Jim Cramer warns savvy investors to be cautious and skeptical in the current volatile market atmosphere.

He urged investors not to buy or sell stocks based on last week’s brief inversion of the yield curve in the bond market.

Yields for 2-year and 10-year U.S. Treasuries inverted for the first time on Wednesday since June 2007, in a sign of investor concern that the world’s biggest economy could be heading for recession, Reuters said.

Such a move preceded every recession over the past 50 years.

“Everything seems like a trap now,” he told CNBC. “It was a trap to sell off the inverted, and now they have to go buy back on the uninverted,” he said.

“The idea that we uninverted the yield curve is something that lasts for, who knows, like an hour,” the “Mad Money” host said, facetiously, arguing against reading too much into the inversion theory, CNBC.com explained.

Cramer said he hears more doom and gloom in the media than he does from companies. “I do feel like things are worse when I listen to people talk, than reality,” he said.

U.S. stocks climbed on Monday as reports of stimulus efforts in China and Germany calmed fears of a severe downturn in the global economy that were stoked last week as bond yields fell, Reuters explained.

China’s central bank unveiled a key interest rate reform on Saturday to help steer borrowing costs lower for companies. On Sunday, German Finance Minister Olaf Scholz suggested that Berlin could make available up to 50 billion euros ($55 billion) of extra spending.

“Those are positive stories, and it’s fostered a risk-on environment that has persisted throughout the day,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “Investors are glad to see that countries are recognizing the risks out there.”

For his part,  President Donald Trump held a conference call on Wednesday with the chief executives of the three largest Wall Street banks as financial markets were in turmoil, one source with direct knowledge of the matter said on Friday.

U.S. Commerce Secretary Wilbur Ross on Monday added to a chorus of presidential officials downplaying concerns over a looming recession after the U.S. Treasury yield curve temporarily inverted last week for the first time in 12 years, Reuters reported.

“Eventually there’ll be a recession but this inversion is not as reliable, in my view, as people think,” Ross said in an interview with Fox Business Network.

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CNBC’s Jim Cramer warns savvy investors to be cautious and skeptical in the current volatile market atmosphere.
jim cramer, investors, trap
Monday, 19 August 2019 03:16 PM
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