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Cramer says the market is treacherous right now and we need some stabilization in tech


CNBC’s Jim CramerMonday’s announcement said that the tech stock market destruction isn’t being as well reflected in the price-weighted index. Dow Jones Industrial AverageThis year, banks have been strong.

Cramer claimed that the damage being done to the markets by banks is “totally masked”, which makes the Dow Jones Average seem so great in comparison to NasdaqThe S&P 500These companies have greater exposure to Big Tech. Dow’s 30 stock price movements are the only measure of it. The Dow includes four financial giants (American Express, JPMorgan Traveler’s Bank, Traveler’s Bank, Goldman Sachs and JPMorgan). The average also includes Visa, but this stock relies more on consumer economic activity rather than rates.

The S&P 500 and Nasdaq on Monday extended their losing streaks to five straight sessions, dropping nearly 2% and more than 2.5%, respectively. Last week’s loss for the Nasdaq was 4.5%. The S&P 500 lost almost 2% last week.

Cramer noted that the Dow recently performed better than usual, with a loss of 0.3% in its last week. The blue-chip average lost more than 500 points (or almost 1.5%) Monday due to losses in Nike, Visa, and other companies. The Dow and S&P 500 both hit record closing highs early last week before increases in the 10-year Treasury yieldCast a shadow over stock markets

Stocks in general — but especially growth stocks, many of which are tech stocks — are not worth as much in a rising rate environment. However, banks are able to make more when interest rates rise, which is what has driven gains for 2022.

“I consider this market treacherous. There needs to be some stabilization of mega-tech. Cramer, speaking on “Squawk in the Street”, said that they haven’t.

The S&P 500 Information TechnologyIndex, which includes some of Silicon Valley’s biggest names, dropped around 7% in the first half of this year according to FactSet. In the same period, index dropped by approximately 7%. S&P 500 FinancialsThe index gained approximately 4% in the year to-date. All of the S&P 500 sectors fell Monday. Energy and financials had both been trading in the green just after the opening, but then reversed their fortunes.

The 10-year yield on Monday topped 1.8%. This is the highest level since January 2020. Tech stocks won’t be helped by this rate. This rapid rate rise is indicative of expectations regarding the imminent tightening of monetary policy. Federal Reserve. Investors have begun to dump tech shares due to rising rates. This is because they believe their future earnings are less worth it, which makes it difficult for the group’s valuations.

Goldman SachsExpect the Fed to raise interest rates at near-zero levels four times this yearAs inflation rises, the country’s unemployment rate falls. Minutes from the December Fed meeting were released last week. They discussed a reduction of balance sheets and signaled rate rises.

This week, investors hope for more clarity from the Fed Chairman Jerome PowellHe will testify Tuesday in his Senate nomination hearing. On Wednesday and Thursday, the wholesale and consumer inflation reports will be released. The earnings season begins with the release of quarterly results on Thursday. JPMorgan Chase, CitigroupAnd Wells FargoFreitag

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