As if the Dow’s 119-point loss and a 2.7% hit to the Nasdaq weren’t proof enough, Cramer also pointed to the action in SPX , the heavy-machinery company that dropped 11% today after “a major guide down.” This economically sensitive stock offered all the evidence needed to warn investors of an impending pullback.
Now, Panera Bread told a different story, reporting a solid quarter and boosting its guidance. But the gains seen in that stock – 7% for the day – aren’t applicable across the board. Increased traffic at this higher-end restaurant usually indicates a more spend-happy consumer, but given the bad news in new-home sales, oil prices and computers, there’s no reason to feel confident that the economic rebound we enjoyed, however briefly, will continue.
The industrials took an “incredible clocking,” Cramer said, meaning, “We are right to worry that a new leg down might have begun.” There were other signs, too, as the market leaders – tech, the banks and oils – that carried us from the early March lows began to break down. Acer said the computer biz was tailing off, and that put pressure on tech’s bellwethers, Google and Apple . Housing’s poor performance and the continued trouble in US employment is hurting the banks. And oil prices seem to meet a resistance level, only to fall back with its leadership cohort.
Need still more proof? The only stocks that did well on Wednesday were those that thrive during a downturn: Walmart , Coca-Cola , Colgate-Palmolive .
“My conclusion is this market smells no end to the recession,” Cramer said, “and that we have seen the highs” for the year.
He recommended that investors take profits while they have them. The 5% to 7% decline that Cramer had been predicting “at last is upon us.”
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