Jim Cramer, a well-known financial host on CNBC, analyzed the reasons why U.S. stocks could reverse sharply on Thursday (24th), including factors such as the lower-than-expected extent of U.S. sanctions and bargain-hunting buying.
The “black swan” of the full-scale war between Ukraine and Russia swept the global market, causing Asian and European stocks to close down sharply on Thursday, including the pan-European STOXX 600 index fell more than 3%, but US stocks showed resilience and bloodbath on Thursday. After falling more than 2.6% in early trading on Thursday, it closed up 1.5%. The Nasdaq Index once fell nearly 3.5% and then recovered about 3.3%. The Dow Jones rebounded after plunging 859 points in early trading, closing around 92 points in the red.
“It took investors a long time to digest the Ukraine-Russia war, and the Biden administration warned the market about it every day, and that’s one of the reasons for the sell-off in stocks over the past few weeks,” said Jim Cramer, a well-known financial host on CNBC.
Cramer explained that strong consumer spending and a solidly recovering job market helped keep U.S. stocks flat. Some investors may also choose to ignore the Ukrainian-Russian war because they believe Biden’s promises to impose broader economic sanctions on Russia are not credible.
The U.S. Commerce Department on Thursday slightly revised up U.S. fourth-quarter gross domestic product (GDP) quarterly growth to 7%, from 6.9% previously.
The U.S. Department of Labor announced on Thursday that the number of Americans receiving initial jobless benefits in the week ended February 19 was 232,000, lower than market expectations of 235,000 and a decline from the previous week, indicating that the U.S. labor market has improved.
Biden offered a second wave of sanctions on Russia on Thursday, but markets were relieved that the United States and the European Union did not currently plan to exclude Russia from the SWIFT international settlement mechanism or impose energy sanctions on Russia.
Despite the uncertainty surrounding the Ukrainian-Russian war, Cramer said: “Investors shouldn’t be emptying their portfolios, selling stocks is someone else’s business, but I’ll be looking for opportunities to buy on dips.”
