Jim Cramer argues the bears are wrong: The economy and market are actually strong

Published Wed, Oct 11 20231:11 PM EDTUpdated Wed, Oct 11 20234:42 PM EDT

We've had quite a run these last few days and the Club put a lot of money to work ahead of the recent rally, which has seen the S & P 500 climb roughly 3% since the start of last week. That's partially because of how oversold stocks were, according to the S & P 500 Short Range Oscillator , but also because we felt the doomsayers had pressed their luck. Things just aren't that nightmarish and bond yields have come down, with that of the 10-year Treasury pulling back to under 4.6%. So, let's assess where we are. Last Friday, the U.S. Labor Department's monthly jobs report showed employment grew in September, even as inflation has eased. Small-and-medium-sized businesses appear to have been the biggest hirers last month, with surprising vigor, now that many American workers have run out of their pandemic-era savings. Plus, recent immigrants may be winding their way into the workforce, taking jobs that had gone begging. The job situation is a complex mosaic — one that's not cooling enough, even as there's diminished wage inflation. That's a true conundrum for policymakers at the Federal Reserve. But one thing's for certain: this new workforce takes the pressure off Fed Chair Jerome Powell to do multiple interest-rate hikes from here, and it diminishes the so-called hard-landing scenario for the economy. Lower rates with higher job growth — an uncertain positive that I can't recall ever seeing — may be upon us. Powell doesn't want fewer people working, he just wants overall stable-to-even lower wage growth. That obviates the need for more than one or two further rate increases, and should put the Fed on pause if the monthly consumer price index comes in soft on Thursday. It allows the yield curve to inch toward steepness, which is a return to, perhaps, pre-Great Recession normalcy. It's what any stock picker wants regardless of the long-term nature of the budget deficit or the stalemates in Washington, D.C., or even next year's presidential election. The Fed last month held interest rates steady , while indicating it expected to raise its benchmark interest rate one more time before the end of the year. More broadly, no one's disputing the larger, existential issues facing our country — including too much debt, higher financing rates, out of control entitlements and the need for still-higher taxes. The wealthiest of our time will continue to cry wolf as they have since 1979, when I bought my first stock against everyone's advice. But as bungling a country as we can be, we will ultimately figure out how to manage the huge borrowings, either by trimming the entitlements or massively refinancing the debt. Rates can go higher, especially at the long end, but we will not default. I don't share the doomsday scenario laid out by the super-wealthy wherever they pollute. They don't understand the greatness of a country tested by worse countenances, something they so often refuse to acknowledge, because they don't care about you. They are not Club members. They never suggest anything constructive. And that's not our way. If you take the existential off the table and realize the market strength the bears cannot see, you actually want to own stocks. And so we do. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) 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.

A pedestrian passes a Wall Street subway station near the New York Stock Exchange (NYSE) in New York, U.S., on Monday, June 27, 2022.

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