Jim Cramer from CNBC shared his outlook for the upcoming week, expressing concern that ongoing high oil prices resulting from the conflict in Iran could further drag down stock performance.
“It’s yet another rough week. It’s been four weeks since the conflict began, and things aren’t looking good,” Cramer remarked during his show “Mad Money” on Friday. He noted the historical correlation between oil crises and bear markets, pointing out that “the history of oil shocks is filled with significant drawdowns for the markets.”
On Friday, stocks finished lower, with the Nasdaq losing 2.15%, the Dow down 1.73%, and the S&P 500 dropping 1.67%, marking the fifth consecutive week of losses.
Given the unpredictable nature of conflicts, Cramer observed that one trend is consistently favorable. “The one thing that seems reliable is investing in oil stocks. They fluctuate, sure, but oil prices are generally on the rise,” he said.
This shift is causing a significant change in investor focus away from tech stocks. “No one seems to be favored now, not even those once adored, who are now despised,” he noted. Cramer pointed out the broad apathy among investors, saying, “People are indifferent to whether it’s a soft drink or pharmaceutical stock. I find myself leaning towards oil drilling companies.” There’s no complex reasoning behind it.
Looking into the week ahead, Cramer has a few key events to monitor:
Monday
Market movements will likely hinge on new developments regarding the Iran conflict. With the vital oil shipping route through the Strait of Hormuz still congested and ongoing tensions between the US and Iran, there’s a strong likelihood of escalating oil prices, which could negatively impact stocks.
Tuesday
McCormick & Company will be announcing results that could lead to negotiations for acquisitions, particularly concerning Unilever’s food brands. “I’m a fan of this duo and genuinely hope for their success,” Cramer expressed. Additionally, Nike, which has been facing intense competition and inventory issues, will provide updates as well. Cramer remarked, “Nike seems to have little chance of bouncing back to its former glory.” Investors can also expect reports from the Bureau of Labor Statistics, including the monthly Job Openings and Labor Turnover Survey.
Wednesday
Conagra Brands is slated to report its earnings, which will offer insights into the struggling packaged food sector alongside retail sales data that reflects consumer spending trends. Cramer suggested that weak economic numbers might give the Federal Reserve the justification needed to lower interest rates.
Thursday
Acuity Brands will provide updates on the commercial lighting market, which has seen stocks decline by 25% so far this year, largely attributed to a slowdown in construction and housing. Cramer noted that there appears to be “little hope for any acceleration” in this sector at present.
Friday
Employment data is set to be released on Good Friday when markets will be closed. Cramer indicated that softer numbers might support the case for a rate cut, but the overall sentiment remains quite bleak. “Our outlook on stocks right now is as pessimistic as it was at the start of the pandemic,” he commented.
In conclusion, Cramer said, “This downward trend isn’t solely tied to the tech sector. It’s about the interplay of inflation and rising interest rates.” He believes that market pressures will likely persist until oil prices decrease and the conflict concludes.
