CNBC’s Jim Cramer said Monday that Monday’s rally will not last because none of the headwinds to the economy have abated.
Stocks rallied on Monday after an ugly end to the month and quarter on Friday, marking the best day since June for the Dow Jones Industrial Average and the best day for the S&P 500 since July.
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Cramer noted that the market has seen some sporadic one-day rallies recently, but they have always been let down by three things. Wednesday’s rally will likely face a similar fate, he added.
According to Cramer, there are three things preventing the market from having a sustained rally
- The Russian invasion of Ukraine continues. Cramer pointed out that the two countries are still at war and that it seems likely that the energy crisis it is fueling could have serious consequences during the winter months.
- China is still under Covid lockdown. While tech stocks rallied on Monday, many are dependent on China, which is still bound by Covid lockdowns with no end in sight.
- Inflation driven by working from home continues to rise. Wages, food and housing prices remain too high, Cramer said, adding that he does not have high expectations for the release of the nonfarm payrolls report on Friday.
He also said the market is still incredibly oversold.
“The most impressive thing about today’s rally is that it happened. My sense is that today’s bounce is about too much negative sentiment,” he said.
