CNBC’s Jim Cramer on Thursday predicted that Wall Street would soon bottom out and the market would be set for a “huge rally.”
“Suddenly, conventional wisdom says that there is too much of everything, so prices will fall. Stock prices expect it. And therefore, the only sectors that survived the growth in the first quarter were oil, and therefore housing and communal services, which really work well only when there is a strong recession,” the Mad Money host said.
“We are assessing this negativity much faster than you think. Maybe it will take a month, maybe just a few weeks. But it will happen, and once it happens, we will be ready for one incredible, amazing rally,” he said. later added.
The Dow Jones Industrial Average fell 1.56% on Thursday, the last trading day in March. The S&P 500 was down 1.57% and the Nasdaq Composite was down 1.54%. The Dow ended the quarter down 4.6%, the S&P 500 down 4.9% and the Nasdaq down 9%.
“Even though we still have a problem with inflation, today’s action predicts a collapse in sales for almost everything … I say just let it continue to decline for now. Accept that there will be a lot of stories about, say, AMD having too many chips, or GM having too many cars, Lennar having too many houses, Home Depot having too much inventory,” Cramer said, listing some of the companies whose stocks fell during the session on Thursday.
” [Federal Reserve] will definitely raise interest rates, maybe many times over, the recession will accelerate and inflation will definitely be tamed. Most importantly, the market will anticipate all of this and will bottom much earlier than anything I just described,” he added.
Disclosure: Cramer’s Charitable Trust holds shares in AMD.