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ne erica ment educate teach call me 1-800-743 cbc or tweet me at jim cramer i've been thinking i've been thinking like this maybe every stock every stock just got too expensive maybe everything was simply too high and had to come down to more reasonable levels well that's certainly how it feels after still one more bad day where the dow lost 229 points s and p dropped 1.15 and then as that plunged 1.87 percent getting used to that yet we're seeing all sorts of stocks lose gobs out and it's often happening for no apparent reason sure we've had shortfalls this earnings season tons of de facto guidance cuts where you beat the numbers for the quarter but don't raise your full year forecast however the treacherous thing about this market is that if you see even one stock coming down hard in a particular sector you know the rest of them are going to implode too perhaps coming down even harder than the original culprit of course many of the problems relate to individual companies both microsoft and alphabet are classic examples they reported after the close both reported what looked to be very good numbers but not good enough numbers but maybe good enough because of a weak dollar or maybe not if they had a weak dollar may they'd be better strong dollar no yes it is that confusing you can't even get a read when the stocks are right in your face and that does cause you to pull back itself for 45 minutes i looked at these i you no one knows if they're good i swear to god the companies don't even know but sometimes it is real clear and everybody knows like with the stock of america's largest retailer walmart it pre-announced a huge disappointment last night i mean one of the worst i have ever seen and weighed heavily on the tape all day bringing down the entire retail cohort if not huge part of the market that's easy because they're all in the same etfs we had laos at shopify because they misjudged e-commerce's growth just like amazon crushing anything that even looks like an e-commerce stock but for the most part the earnings today were actually solid that's what's really confusing mcdonald's mcdonald's reported such a great number oh much better than expected i was pleasantly surprised at how general electric's doing in aerospace also healthcare even power i loved how 3m announced a giant spin off its healthcare taking taking its healthcare division out very clever plan to coordinate some liabilities stemming from allegedly faulty earplugs for service members nxp semi the chipmaker with heavy auto exposure delivered a strong beaten raise yes still all this good news just wasn't enough to lift the averages because there were just too many negatives and stocks may just be too darn high the analysts played a role in today's fiasco a brutal downgrade of the once invincible cyber security company z-scaler crushed that whole cohort which had been one of the strongest even during the downturn it hurt competitors like crowd strike and kramer fave palo alto networks but what i think did this market end was the same thing it's done in info almost the entire year persistent inflation coupled with a federal reserve that can't seem to win no matter what it does not to mention instability in europe thanks to russia's invasion of ukraine the weakness of china caused by the lockdowns and the immensely strong dollar no matter what we do we can't escape the tentacles of these issues and by the way that includes the confusing microsoft and alphabet quarters tonight i found myself thinking without that well hey you know what at least it isn't snap low bar perhaps we can get some bad news as good news we leave tomorrow when the federal reserve will raise interest rates again still while we've had some relief rallies over the years when the fed tightens and then tends to uh let's say we're done for a while but i don't know if they're going to do that yet we're not that far along in the rate cycle yeah i'm sure the fed has been twisting between themselves about how much what to do given so much is going on so i'm going to put you in the dilemma let's go through the dilemma of what jay pal must be thinking because it really makes sense why even he would be confused i want you to think of last friday on friday american express which everybody knows great credit card company reported about the best quarter i can remember there's tremendous spending going on travel going out restaurants it's so far above 2019 it's insane there seems to be no stopping people from going all over the place especially young people who are using credit cards in incredible numbers but then today walmart stock got crushed because the consumer apparently doesn't have much money to to buy groceries and then buy clothes now that there's no more stimulus walmart seems astonished by the lack of spending they think the consumers tapped out because of inflation so on the one hand you have a consumer who's crippled by the endless rise in food prices and the formerly rising price of gasoline so crippled that all these dresses pants and sneakers languish on the shelves on the other hand the consumer won't pay anything to go out and at the time of their life in any country especially because the dollar's so strong it's easy for jay pal to say that american express and walmart are talking about two different consumers regular people who tapped out because of inflation and the wealthy you were spending their darn full heads off he wants to slight the wealthy right not the working person but there's got to be some overlap so that makes no sense if you're j-pal you want the economy to slow down to the point where there are enough people to fill jobs at raytheon tech 5 000 engineers needed after a good quarter without raising wages too aggressively but without a ton of excess unemployment either what a needle or thread who could be that good and plus you know we know that 45 million people switch jobs in the last year mostly for better pay but then again who cares if the better pays only up four percent when the entire cost of living is up nine percent think about these things think if you had his job so what does pal do here does he say that the blood of goods at walmart should lower the price of clothes meaning he's winning the war against inflation he might not need titans aggressively going forward or does he say food and gas that are too high so he's going to slam the brakes in the economy create more gluts that will push prices lower and hope that food comes down with that nobody knows and when nobody knows the wall street playbook says sell sell sell especially ahead of a fed meeting sell sell sell now here's where it really gets difficult it isn't difficult already we're in the toughest earnings week of the year we know it only takes one misstep at a single company to bring down every other stock in the sector everything is guilty until proven innocent plus the whole market feels too high if the fed's going to have to keep hitting us with these series of these big rate hikes to catch up with inflation that means we simply don't know what anything's worth we have too many things going wrong to be able to make a judgment which gets us back to ukraine and china if we had an end to the war then we'd know that things would get better in europe russia just needs to declare victory and move on that'd be extremely rational but each day a rational outcome there seems less likely as for china we keep thinking the communist party will come to a census and start using the good mr mrna vaccines but it seems to have no interest in using anything that isn't homegrown so let's put it all together you have an uncertain fed in uncertain europe and uncertain china and uncertain america with rates going up not down all told these things tell me that the stock market in its entirety is still too high so we have to let the averages come in before putting more money to work but it might be worth doing so because there's so many good things that can only happen can individual companies save the day well alphabet the parent of google just reported worse than expected but better than fear quarter after the close the stock still rallied after our trading because it had already come down so dramatically from as high as the lesson at least for alphabet the bar have been lowered to the point where this was good enough not a great reason to buy but perhaps a reason not to sell microsoft isn't holding up as well their cloud business is weaker than expected and their gaming business gets getting slammed then again the fact that it wasn't down more tells you that this was already priced in two again the dollar is playing havoc with both companies so it's hard to figure out how they're really doing and we do have some genuine upside surprises look at chipotle roaring in the wake of a fantastic quarter thanks in large part to their ability to raise prices because their food's so good then again that's not what you want to see if you're hoping the fed can win its word inflation without creating the whole economy but the bottom line in this exhausting tape it's a tough moment because the situation is so darn confused by the dollar by the russell ukraine war by the chinese lockdown rising short rates retreating long rates a sure sign of recession and we won't have any real insight where this market's headed until tomorrow afternoon when maybe we'll get some clarity from the fed it's just a tough moment for everyone from the fed to the trading desk to you and it doesn't seem like to be the time to be let's say heroic lane in new york lane jimmy bailey big boston red sox booyah to you big jimmy daddy i i don't think you can get better that except for maybe biggest got to do with you know the wrong part of your well no i don't want to get too deep in that go ahead lane what's up all right what would be better for my portfolio me keeping home depot or going with a company like tractor supply i work for both companies both have a good yield what what do you think i should do big daddy boy well you know i pulled up with hal lawton last week and i don't know if you caught that interview from from what he's doing at tractor supply but i think that they're terrific it really is and there at least we know how they're doing we don't have to sweat the program like we have to do with home depot right now lane uh tractor supply would be the one for me simply because i don't know how home depot is really doing right this is a confusing moment everybody and we won't have any real insight into where this market's headed until tomorrow maybe we'll get some clarity then no heroics please oh my money tonight i'm getting the real deal on steel with the top bass of steel maker nuker then logitech report a disappointing quarter but just like the rest of this tape the stock managed to rally i'm digging deeper into the quarter what drove the action with the company ceo plus is the strong dollar actually earning puppies this earning season i'm taking a post a look at foreign exchange headwinds like those we have never seen and how they might be impacting bottom lines om
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