Cramer: It's a mistake to buy stocks now
Investors need to know more about the Malaysian jet crash before trading, the CNBC host says.
Jim Cramer often says to buy on weakness. This, however, isn't one of those times.
Instead, Cramer is cautious of stocks, broadly.
Although Cramer doesn't enjoy focusing on money in the wake of tragedy, especially when lives have been lost, Cramer believes any and every catalyst that moves the market must be weighed by investors. Nothing less would be prudent.
And on Thursday, a powerful catalyst roiled markets. A Malaysia Airlines Boeing 777 with 295 people aboard crashed and burned in an eastern Ukraine wheat field near the Russian border. Ukrainian officials called the crash an act of terrorism and said the plane might have been shot down by a Russian-made antiaircraft system.
Developments sent the Dow Jones Industrial Average ($INDU) tumbling by triple digits. And although Cramer has, in the past, advocated buying geopolitical induced selloffs, this time, Cramer would not buy the dip.
"First, the market was barely down on the news. Our averages have gone so high that even 130 points down on the Dow when it is at 17,000 is next to nothing," Cramer explained. "Second, I can not sanction any buying until we know more details about the crash."
"Also President Obama announced tougher sanctions last night against Russia for its meddling in Ukraine," Cramer added. That too, could generate a ripple in unforeseen directions.
As if that weren't serious enough, market headwinds are blowing elsewhere in the world, too. In the Middle East, the Israeli military launched a ground offensive in Gaza. A statement from the Israeli military said the operation will include "infantry, armored corps, engineer corps, artillery and intelligence combined with aerial and naval support." That, too, could spook markets.
Given the potential for so many unexpected developments in two global hotspots, Cramer said that heading into the summer weekend, pros will most likely take profits. "They will be concerned that something could happen over the weekend and they'll lock in gains. That's the likely scenario."
And, making a selloff even more likely, Cramer added that events sent investors into bonds, which in turn sent interest rates lower. "Those lower rates are negative for banks. And banks had been a leadership group in the rally."
All told, Cramer can't sanction buying, not yet. "With markets near their all-time highs, I believe that as pros assess these developments over several days, the inclination will be to take profits, not to buy. At this point you have to monitor developments very closely and see what develops."
More from CNBC
- Cramer’s favorite ‘Delivering Alpha’ ideas
- Paulson: Buying a home is the best investment
- Bigger worry than geopolitics? The Fed, of course
he will keep making these calls until we get a correction at which point he will be right and use this to sell his crappy advice
companies are relocating to other country, old people are retiring in other countries, and the poor of other countries are coming here? It looks like we are heading to be the poorest country?
Congress is who the American people should be livid about, they get big bucks and are stuck on abortion, gay marriage, and impeachment, and the dems are no better at doing anything for the
Lee you forgot to get a plug in for Cramer's book......... I can hear him screaming at you now
You know nothing......... NOTHING!
Speaking of Cramer, there is another article on MSN today called: .
Kinda sounds like Jim to me.
When a New York Times article cast doubt on the accusation Usama bin Laden had a hand in the 1998 bombings of African embassies, President Clinton questioned his own CIA, according to a note he scrawled to his national security adviser.
The memo, part of a 1,000-page release of documents Friday afternoon by the National Archives, was written after the president apparently read an article in the self-professed "paper of record" casting doubt on the U.S. Justice Department's case that the Al Qaeda mastermind was involved in the Aug. 7, 1998 bombings of U.S. embassies in Kenya and Tanzania. Some 224 people were killed in the twin attacks, including 12 Americans.
Two months later, a federal grand jury in New York indicted bin Laden and 20 others for participating in a terrorist plot to kill Americans. But the Times article, entitled “U.S. Hard Put to Find Proof bin Laden Directed Attacks,” and written the following April, raised doubts about bin Laden's involvement, at least with Clinton.
“Sandy, if this article is right, the CIA sure overstated its case to me — What are the facts?”
- President Clinton, in '99 memo
Don't feel too bad Little Beav. Obummer is the most unpopular president ever here but they love him in North Korea, Russia and Syria.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Traders might want to bite on BABA, but long-term investors have reasons to wait.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.