On August 27, Jim Cramer predicted that the equity market could witness a rebound in September. On the same date, on a month-to-date basis, the S&P 500 Index (SPY) and the Nasdaq-100 Index (QQQ) fell 3.7% and 3.6%. Notably, the equity market was experiencing the second-worst month in 2019. Recession fears rose significantly after the yield curve inversion.
Overall, Cramer based his analysis on three charts including the advance or decline line cycle forecast, the CBOE Volatility Index cycle forecast, and the S&P 500 E-mini cycle forecast.
Trump is confident about the economy!
Since August, President Trump has tweeted many times that the US economy is in great shape. As we discussed earlier, recession fears were making headlines. The fears could pose a serious threat to President Trump’s reelection chances.
In a tweet on Monday, President Trump said, “our Country is doing under MY Leadership, including the Economy, where there is NO Recession, much to the regret of the LameStream Media!” On September 6, he tweeted Cramer’s statement that he isn’t worried about the recession.
Market rebound in September
SPY and QQQ have each risen 1.8% in September. The Energy Select Sector SPDR ETF (XLE) has risen 4.7%—the highest among sector-specific SPDR ETFs. The Financial Select Sector SPDR ETF (XLF) rose 3.5% and had the second-highest gains. In August, XLE and XLF underperformed the sector-specific SPDR ETFs. The rebound in the market was in-line with Cramer and President Trump’s expectations.
As October’s trade talk gets closer, we could see a surge in the Technology Select Sector SPDR ETF (XLK) later in September. So far, XLK has risen 1.7% in September. The US-China trade talks will likely impact US chipmakers including Intel (INTC), Qualcomm (QCOM), and Micron Technologies (MU). In September, Intel, Qualcomm, and Micron Technologies have risen 8.8%, 0.6%, and 8.5%, respectively.
Cramer’s recent recommendations
On September 5, during CNBC’s Mad Money, Cramer said that Netflix (NFLX) is his least favorite FAANG stock. He expects a 20% upside in Amazon (AMZN). On a year-to-date basis, Netflix and Amazon have risen 10% and 21.9%. In August, Cramer recommended Canopy Growth and Cronos Group. For HEXO, Cramer said investors should be careful.