Mad Money

Jim Cramer's five factors that could improve market conditions and help interest rates peak

Key Points
  • CNBC's Jim Cramer on Wednesday laid out five scenarios that could improve the market and help interest rates reach their peak.
  • The factors include weaker economic data and more buyers in the bond market.
Stock prices have become divorced from the fundamentals of their companies, says Jim Cramer
VIDEO1:5301:53
Stock prices have become divorced from the fundamentals of their companies, says Jim Cramer

CNBC's Jim Cramer on Wednesday laid out five scenarios that could improve the market.

To Cramer, interest rates need to stabilize in order for stocks to trade based on company fundamentals, and these factors could help rates reach their peak.

  1. More bond market buyers: Cramer said there needs to be more buyers than sellers on the bond market. He said he thinks this could occur if bond yields go higher and prices go lower.
  2. Weaker economic data: Weaker economic data would allow the Federal Reserve to ease up on rate hikes, Cramer said.
  3. Layoffs: Unless job growth ends and job reductions begin, Cramer said interest rates will continue to rise.
  4. Cheaper stocks: To Cramer, the market may keep going down unless stocks get to a place where it doesn't make sense to sell. He said the "tyranny of the bond market" can end once bonds get attractive in yield or stocks get attractive in price.
  5. Flight to safety: Cramer said there may be a need for a "flight to safety," where uncertain conditions such as geopolitical turmoil cause investors to shift from risky investments to safer ones, like Treasurys.

"All of these things will eventually create an investible moment," Cramer said. "Until then, though, even the moves of the best stocks are just a trade."

Weaker data will cause the Fed to stop raising rates and selling bonds, says Jim Cramer
VIDEO11:5311:53
Weaker data will cause the Fed to stop raising rates and selling bonds, says Jim Cramer

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