Prominent market commentator Jim Cramer reportedly cautioned investors on Wednesday that the market is in a consolidation phase and is currently getting rid of “weak-handed investors.”
“I think we have a … period of consolidation, as we get rid of the weak-handed investors. And we certainly wash out those who got carried away and committed personal fouls, like buying bitcoin above $20,000 or fooling around in meme stocks,” Cramer said, according to a CNBC report.
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The market had to digest a barrage of data releases on Wednesday. Major Wall Street indices closed over 1.2% lower dragged by renewed concerns of recession as U.S. retail sales declined by the most in 12 months -- down 1.1% in December as against expectations of a fall of 0.8%. At the same time, U.S. Producers Price Index, too, dropped more than anticipated, falling 0.5% month-on-month.
As a result, the SPDR S&P 500 ETF Trust SPY closed 1.58% lower while the Invesco QQQ Trust Series 1 QQQ lost 1.3%.
“Right now, the market’s working off one of the most overbought conditions we’ve had in ages. In the last two weeks, we simply rallied too far, too fast. It’s not that everything’s horrible,” Cramer said.
Earnings: The expert also highlighted the story about Microsoft Corp MSFT laying off 10,000 employees but noted other industries have shown much more resilience.
“Vast swaths of the economy are holding up just fine. The problem lies in tech, as I’ve been telling you for months on end,” Cramer said. “The bears — they will be out in full force tomorrow,” he warned about the short-term.
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