As of now, there’s a consensus on Wall Street that at least one, if not two, of these events will go bad, and that’ll cause a 3-percent to 10-percent correction in stocks. Here’s how the Street breaks it down:
A Republican win of either house of Congress, and the House is looking more likely than the Senate, will sink stocks for that first 3 percent. Why? Because while the victory would slow down President Obama’s agenda, which many see as anti-business, the White House could still enact regulations at the federal level. Wall Street sees any opening for Obama as a bad thing, and that will weigh on stocks.
In regards to the Fed announcement on Wednesday, we will almost definitely get news of further quantitative easing, Cramer said, it’s just a matter of how much. Whether it’s $250 billion or $2 trillion, though, and estimates are all in that range, just know that the bears will be on the attack. They’ll say that even that $2 trillion won’t be enough or that’s it is too inflationary. If that happens, the market decline jumps to 5 percent.
Expect 10 percent, Cramer said, if Friday’s unemployment number is bad, too, because the academics like Nouriel Roubini and Joseph Stiglitz will jump all over it. To them, it’s a sign of the Apocalypse. Well, at least a double-dip recession. And renowned bank analysts Meredith Whitney will chime in, saying it’s terrible for that sector as well. In this case, you get the trifecta—politics, policy and jobs—and the losses in stocks creeps into double-digit territory.
Cramer’s not so sure that’s going to happen, though. This kind of negativity is so common place, he said, that it’s probably already baked in. So maybe there’s a chance investors hunker down for the week and then emerge, rally ready, on Friday, even if the jobs number is weak.
“Or to put it another way,” Cramer said, “the scariest thing that happens in the near future is Halloween, and the likelihood of a 3% to 10% pullback diminishes the more I hear it whispered.”
Cramer will still watch earnings next week, especially around hot-button issues. BP and Anadarko Petroleum —on Tuesday and Monday, respectively—will key us in on the Gulf of Mexico oil spill, which reentered the news on Thursday. Vulcan Materials , also on Monday, will provide information on stimulus spending. Chesapeake Energy on Wednesday is an open window on natural gas. And Emerson Electric will give us a picture of macroeconomic issues and, Cramer hopes, reignite the industrials group.
Lastly, on Tuesday there’s Clorox , which gets virtually all of its sales from the US. The metrics to watch here are volume and pricing power.
“Of course,” Cramer said, “all of these earnings reports are of diminished importance compared to the three big bad events of the week.”
Call Cramer: 1-800-743-CNBC
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the Mad Money website? email@example.com