CNBC’s Jim Cramer on Friday warned that a 50-basis point rate hike could be coming if the March labor report set to be released next Friday reveals a tighter-than-ever job market.
“I fear that it will show the tightest labor market in 50 years. … If Fed Chief Jay Powell doesn’t catch a break when it comes to inflation, then it’s 50-basis point rate hikes for as far as the eye can see,” the “Mad Money” host said.
“Even if we get lots of inflationary data next week, I think it’s already being reflected in the stock market, as we’ve come to accept the fact that the Federal Reserve is on a mission to” tamp down inflation, he added.
Cramer’s comments come after traders issued predictions for half-point rate hikes in May and June in response to Federal Reserve Chair Jerome Powell’s pledge on Monday to act aggressively against skyrocketing inflation.
The Dow Jones Industrial Average gained 0.4% on Friday, while the S&P increased 0.5%. The Nasdaq Composite inched lower 0.2%. All three major averages rose for a second consecutive week.
Market rallies this week were driven by investors who are hopeful that Russia will halt its invasion of Ukraine and “terrified that they won’t own enough stock in the unlikely event that peace breaks out over the weekend,” Cramer said.
He also previewed next week’s slate of companies reporting quarterly earnings. All earnings and revenue estimates are courtesy of FactSet.
Monday: Dave & Buster’s
- Q4 2021 earnings release after the close; conference call on Tuesday at 8:30 a.m. ET
- Projected EPS: 61 cents
- Projected revenue: $364 million
“They’re both restaurant stocks and retailers, and two have become pariahs in this market. … Let’s hear what they have to say,” Cramer said.
Tuesday: McCormick, Micron, Lululemon, PVH, RH
- Q1 2022 earnings release at 6:30 a.m. ET; conference call at 8 a.m. ET
- Projected EPS: 62 cents
- Projected revenue: $1.47 billion
Cramer said he expects the company to report great numbers due to the popularity of hybrid work that keeps people cooking at home.
- Q2 2022 earnings release after the close; conference call at 4:30 p.m. ET
- Projected EPS: $1.98
- Projected revenue: $7.53 billion
Micron could tell “a story about demand coupled with not enough new supply to upset the Apple cart of pricing,” Cramer said, adding that he believes the stock is a buy for investors interested in domestic semiconductor stocks.
- Q4 2021 earnings release at 4:05 p.m. ET; conference call at 4:30 p.m. ET
- Projected EPS: $3.27
- Projected revenue: $2.14 billion
“Maybe they can stem the selling with this conference call,” Cramer said. “It’s been its own private bear market.”
- Q4 2021 earnings release after the close; conference call on Wednesday at 9 a.m. ET
- Projected EPS: $2.00
- Projected revenue: $2.38 billion
Cramer said he doesn’t expect a big quarter from PVH, noting its “clobbered” stock.
- Q4 2021 earnings release after the close; conference call at 5 p.m. ET
- Projected EPS: $5.59
- Projected revenue: $931 million
RH will crush the numbers yet again this quarter, Cramer predicted.
Wednesday: Paychex, Five Below
- Q3 2022 earnings release before the bell; conference call at 9:30 a.m. ET
- Projected EPS: $1.05
- Projected revenue: $1.22 billion
“This company has a history of delivering beat and raise quarters. With this red-hot employment market, I doubt they could be a disappointment,” Cramer said.
- Q4 2021 earnings release at 7 a.m. ET
- Investor Day at 9 a.m. ET
- Projected EPS: $2.48
- Projected revenue: $1.01 billion
“Lots of analysts have been praising this one lately. I suspect that means they’re going to have good numbers because Wall Street hasn’t been too enthusiastic about retail in general,” Cramer said.
Thursday: Walgreens Boots Alliance
- Q2 2022 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
- Projected EPS: $1.37
- Projected revenue: $33.18 billion
Cramer said he hopes to see Walgreens catching up to competitor CVS. “What’s Walgreens going to do to challenge them? I don’t know, let’s find out.” He said.