CNBC’s Jim Cramer told viewers that Wednesday’s market rally was the “real thing.”
The “Mad Money” host took aim at accusations that the Federal Reserve “engineered” stocks to run higher in a session where the S&P 500 eclipsed the 3,000 level for the first time in history. The Dow Jones Industrial Average gained more than 76 points, the S&P moved 0.45% to close at 2,993.07 and the Nasdaq Composite expanded 0.75%.
Cramer said that Wall Street got a “boost” after Fed Chair Jerome Powell hinted that the central bank may soon cut its target benchmark interest rate of 2.25% to 2.5%. Powell, appearing in front of the House Financial Services Committee Wednesday, justified the need to potentially change monetary policy because of signs that business investments are slowing and other economic uncertainties.
Cramer said there’s no need to fear a “Fed-induced bubble” in the market will cause stocks to soon give up the ghost. A bubble is where stock prices escalate rapidly, followed by a contraction.
In an appearance on CNBC’s “Fast Money,” Wells Fargo strategist Scott Wren said an interest rate cut is not needed and not to trust the rally.
“The prospect of a rate cut is what ignited the market” today, Cramer said on his show. “I’ve been investing since the S&P 500 was at 87 [points]. … I’ve seen this process play out where the stock market rallies on rate cuts the whole darned way.”
The host went on to explain five reasons he thinks the rally was a genuine one:
