CNBC’s Jim Cramer on Monday said that Monday’s rally won’t last because there aren’t any headwinds to the economy that ease.
Stocks rebounded on Monday after a bad month and quarter ending on Friday, marking the best day since June for the Dow Jones Industrial Average and the best day of the S&P 500 since July.
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Cramer points out that the market has seen several sporadic protests in one day recently, but they are always cut down by three things. Wednesday’s rally is likely to face a similar fate, he added.
Here are three things that are stopping the market from having a sustainable rally, according to Cramer
- Russia’s invasion of Ukraine is underway. Cramer points out that the two countries are still at war and it appears the energy crisis it is facing could have dire consequences during the winter months.
- China is still locked down by Covid. While tech stocks rallied on Monday, many of them depend on China, which remains under an unending Covid lockdown.
- Inflation due to workers working from home is still increasing. Wages, food and housing prices are still too high, Cramer said, adding that he doesn’t have high expectations for Friday’s release of the nonfarm payrolls report.
He also said that the market is still oversold.
“The most impressive thing about today’s rally is that it completely happened. My feeling is that today’s rally was caused by sentiment being so negative,” he said.