Expect ‘Mass Panic’ in Markets Friday?
If Wall Street’s reaction to Friday’s gross domestic product report is anything like its reaction to other economic data points, Cramer said during Thursday’s Stop Trading!, expect a sell-off of some kind at the open.
“I’m predicting mass panic tomorrow morning,” he said, mocking skittish investors, “market looking down 15 ticks.”
The reason for this somewhat tongue-in-cheek forecast was the Street’s continued overreaction to any perceived bad news. Take Thursday’s jobless claims numbers, for instance. First-time applications for unemployment benefits fell 31,000 to 473,000, when economists expected a drop to only 490,000. But still the Dow ticked lower as investors focused on the higher four-week average.
Cramer expects a similar response to Friday’s GDP report. He predicted growth of 0.5%, and made a point of announcing what he said was a consensus estimate on-air during Stop Trading!, but he thinks the market will still be shocked when exactly that number is announced tomorrow. And that’s why he thinks stocks will sell off at the opening bell.
“It’s very clear that we’re going to have no growth,” Cramer said. “Why is that shocking?”
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