CNBC’s Jim Cramer, who has been warning people for weeks to lock-in some stock profits, advised investors to look for places to possibly buy in the carnage of Monday morning’s sharp market selloff.
“We’re down on something that nobody really understands,” said Cramer, playing down the worries about another coronavirus lockdown in Europe. He said that from what he sees, the U.S. is not heading in that direction.
“I’m kind of tempted to take the other side of the trade, looking for opportunities. It’s not like we just discovered the downside,” Cramer said on CNBC before Monday’s open on Wall Street, noting that the U.S. stock market has dropped for three weeks straight and many of the biggest American tech companies have seen their shares pull back double-digit percentage points this month.
“Maybe there’s something to buy,” the “Mad Money” host said. “I’m looking for opportunity just because everything is so ugly. Isn’t that when you look for opportunity?” He added. “I love a down opening.”
“I know that you get a lockdown in Europe and you’ve got a problem with some banks and that causes us to go down big? I don’t know. Doesn’t seem right to me,” Cramer said, making reference to bank stocks sinking on the disclosure of confidential U.S. government files that showed that big banks reported to regulators $ 2 trillion of suspicious activity over nearly two decades.
The Dow Jones Industrial Average fell more than 900 points in late Monday morning trading, while the Nasdaq sank further into correction territory, defined as more than 10% below its most recent closing high, which was actually a record high on Sept. 2.
After the open, as the selling accelerated, Cramer said, “I do think that this is the beginning of the end of the sell-off. I’m willing to put it out there like that.”
The rally from the market’s coronavirus lows on March 23 to the beginning of September was “getting overdone,” he acknowledged. But he stressed, “I’m more constructive than I’ve been. I’m constructive.”
In addition to the Covid-19 spikes in European countries and weakness in bank and tech stocks, the market was also worried about uncertainty over the Supreme Court’s make-up just 43 days before Election Day following Friday’s death of liberal Justice Ruth Bader Ginsburg from pancreatic cancer.
The war of words in Washington erupted over the weekend on whether Trump should choose Ginsburg’s replacement or whether the next president should.
Republicans, who hold the slim majority in the Senate, vowed to fill the liberal titan’s seat immediately. Democrats and at least two Senate Republicans, Lisa Murkowski of Alaska and Susan Collins of Maine, said they oppose taking action before the election on Nov. 3.
The fight over replacing Ginsburg has raised concerns over whether lawmakers and the White House might be too distracted before the election to break their deadlock on additional coronavirus stimulus.
— CNBC’s Kevin Stankiewicz contributed to this report.