Eurozone retail sales numbers will be announced on Wednesday. The Spanish government is considering a retail sales tax, which Cramer thinks would be “disastrous” given how weak the Spanish customer is. But so long as German policymakers push for austerity measures, Cramer thinks tax hikes could happen.
“Let's see how terrible these retail sales are without a higher tax rate,” Cramer said. “I bet they're awful. Yet the Germans still want tighter money.”
On Thursday, the European Central Bank will meet and Cramer will be watching.
“We know that the Europeans raised interest rates twice last year. Talk about being stupid. That was amazingly dumb,” Cramer complained. “So far they've only rolled back one of the rate hikes. Isn't it time for them to cut? I would think so. If not now, when? Of course, if they don't cut, expect more pain.”
Crude inventories will also be released. If they spike, Cramer says you can count out any rebound in the oil and gas space. He doesn’t recommend a sizable position in the space unless you are willing to take some “inventory glut pain.”
On Friday comes the Labor Department’s non-farm payroll for June. Cramer doesn’t think the number will be hot given how awful the employment picture has looked lately. He would not buy any industrial stocks ahead of this number.
And here’s the bottom line:
“Next week is the last one before earnings season kicks off, so use any strength to sell stocks in the sectors that are likely to report lousy numbers, particularly the techs, the industrials, and the oil and gas names,” Cramer said. “And, of course, keep an eye on Europe, where the fourth of July is, unfortunately, just another sorry day of the week.”
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