Cramer’s game plan: Oil shock is driving this sell-off and tech won’t bottom until it ends
by Paulina Likos · CNBCKey Points
- Jim Cramer says the market sell-off is driven by rising oil tied to the Iran war, with tech stocks taking a huge hit.
- His game plan highlights key earnings and economic data next week that could determine whether stocks stabilize or fall further.
CNBC's Jim Cramer outlined his game plan for the week ahead, warning that a relentless rise in oil tied to the Iran war is continuing to pressure stocks – and could signal more downside.
"Another miserable week. Four weeks since the war started and it's been pretty darn awful," Cramer said Friday on "Mad Money," adding that "the history of oil shocks is littered with bear markets, 20% drawdowns that say raise cash."
Stocks finished lower Friday led by the Nasdaq down 2.15%, the Dow Jones Industrial Average dropping 1.73% and the S&P 500 falling 1.67%, logging its fifth straight weekly decline.
With the conflict difficult to predict, Cramer said one trade has consistently done well. "Right now, the one thing that's been consistently right is to buy oil stocks. Every time they're down. Every time they're up. It just doesn't matter, because crude is headed higher."
That dynamic has fueled a rotation out of tech stocks. "They're all bad now, including the once loved, now disliked Nvidia," he said, noting investors now favor "they don't mind the soda stocks, any pharma stock, and I gotta tell ya they like the oil drillers. Tech, nothing."
Here's what Cramer will be watching next week:
Monday
Markets will likely remain driven by developments in the Iran war. With the Strait of Hormuz, a critical oil passageway, still constrained, and tensions between the U.S. and Iran still high, it's likely that oil goes higher and therefore, stocks go lower.
Tuesday
McCormick & Company reports with a potential catalyst tied to talks to acquire Unilever's food brands. "I love this combo. I hope it works out," Cramer said. After the close Nike reports. "There's no line of sight for Nike to return to greatness," he said, citing challenges in the China market, along with competition and inventory issues. Investors will also get the monthly JOLTS (Jobs Opening and Labor Turnover Survey) report from the Bureau of Labor Statistics.
Wednesday
Conagra Brands is set to report earnings, offering a read on the packaged food group that's been under pressure. The report comes alongside retail sales which will deliver a pulse on consumer spending health. Cramer said weaker economic data may be needed for the Federal Reserve to justify cutting interest rates.
Thursday
Results from commercial lighting company Acuity Brands will offer insight into construction. The stock is down 25% year-to-date tied to the slowdown in housing and construction, an industry where "there's very little hope in acceleration," right now, Cramer said.
Friday
The jobs report arrives on Good Friday, when markets are closed. Cramer said softer data could help support the case for lower rates. Still, sentiment remains deeply negative. "Right now, we have as much pessimism about stocks as we did when the Covid pandemic swept through us," he said.
The bottom line: "These declines aren't just about tech. They're about what you get when you have both inflation and higher interest rates," Cramer said. Until oil declines and the war ends, Cramer says the market's pressure is unlikely to ease.
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