What Cramer is watching Thursday — Will Powell follow steps of former Fed heads?

Published Thu, Jun 16 20229:06 AM EDT

What I am looking at June 16, 2022 The great conundrum: If Federal Reserve Chairman Jerome Powell can be like former head Alan Greenspan in 1994 then the market is buy. But if he remains committed to no more 75-basis-point hikes (like the one on Wednesday), which is what he sounded like, then we will just keep going down and the sellers of bonds and stocks will be right. The market — futures down more than 500 points in the premarket — acts like someone big will pre-announce? Will it be Apple (AAPL)? Some say the Fed doesn't have what it takes to stem inflation or can't stem inflation. Can George Bailey become Henry Potter (or Harry Potter!)? The bond holders say no and the tech stock holders say no. Bears out in full force today. Where were they yesterday in the rally, when the S & P rose 1.5%? Who were those buyers? Where did they go? Can Powell become like former Fed head Paul Volcker in the early 1980s, who ended inflation with aggressive rate hikes? Volcker history lesson: Inflation went from 1% in 1965 to 14% in 1980, unemployment rose to 9.7% from 3.5%, as Volcker took Fed funds rate target to 20% by December 1980. Second scenario: Greenspan raised rates 7 times by 3-6% in 1994, or the 2000s with 17 hikes (between Greenspan — and his successor Fed chair Ben Bernanke), where the market went higher until mortgage market collapsed … The odd selling of tech stocks at 5 a.m. This kind of program can be either desperation or someone actually wanting tech down, given that many of these techs have aggressive buybacks that would buy stocks higher. The programs just overwhelm …The "urgency" is odd ... Price targets are still so high and until they come down it will be tough to find market bottom. Hain Celestial (HAIN) price target cut to $31 from $36 at Piper Sandler. Remember: The food and beverage company built a big business in Europe and it is hurting now. Etsy (ETSY) price target lowered to $120 from $140 at Oppenheimer on weaker conversion data. The market seems to take aim at DoorDash (DASH), Airbnb (ABNB), PayPal (PYPL), Carvana (CVNA), Affirm (AFRM), Wayfair (W), Shopify (SHOP) and Block (SQ) on these sell-offs. It sometimes feels like they are supposed to be worth dramatically less. How many of these names are owned by hedge fund Tiger Global? Bloomberg reports that partner Sam Harland, who bet big on Carvana, has left the company. JPMorgan sees many upsides to Apple (AAPL) payments, but let's be clear NO ONE CARES. Citi lowers price targets on restaurants. Prototypical upgrade here: Morgan Stanley takes Dollar General (DG) to buy from hold because that is what you buy in a recession. But if there is a recession why are interest rates headed higher? Stagflation. Credit Suisse says Microsoft (MSFt) Azure growth opportunity still ahead, not reflected in estimates. JPMorgan Warner Bros Discovery (WBD) started with a neutral. Meta Platforms data shows engagement rising on Instagram Reels, says Cowen. Reels is competing with TikTok. Boeing (BA) upgraded to a buy from neutral at Citi. UBS cuts price target for Pinterest (PINS) to $19 from $35. Alphabet (GOOGL) price target cut to $2,650 from $3,600 but keeps a buy rating. PTs were so high there's not much they can do. (Jim Cramer's Charitable Trust is long AAPL, GOOGL, MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Jerome Powell after speaking at a press conference in June, 2022.

Olivier Douliery | AFP | Getty Images

What I am looking at June 16, 2022

The great conundrum: If Federal Reserve Chairman Jerome Powell can be like former head Alan Greenspan in 1994 then the market is buy. But if he remains committed to no more 75-basis-point hikes (like the one on Wednesday), which is what he sounded like, then we will just keep going down and the sellers of bonds and stocks will be right.