Jim Cramer discussed his 10 recovery requirements on Thursday. Jim Cramer is one of the top watched TV personalities on CNBC. He is the host of Mad Money and also the co-founder and chairman of TheStreet.com. Nearly two hundred fifty thousand people watch his show daily on TV and most of these are ordinary investors trying to understand what’s going on in the market. Jim Cramer’s bullish and bearish stock picks on his show is the starting point for many investments made by these folks.
Cramer stated 10 things that will have to occur in order for a true recovery in the stock market and economy alike to take place.
1. Leaders Need to Come Back from Vacation
Cramer said that first and foremost, our leaders need to come back from vacation. The President, Speaker of the House and Congress aren’t working and there is no coordination because of it.
2. Banks Reverse and Move Higher
Bank declines are related to unemployment, but as long as this sector is in a freefall, the S&P will continue to go down with it. The continuing declines make this sector almost impossible to invest in.
3. Tech’s Seasonal Slump Ends
The 3rd week of September is usually when the tech slump ends. Cramer said that with expectations so low, tech stocks could go higher if companies could just report in-line earnings, as this is how bottoms get formed.
4. More Mergers and Acquisitions
An increase in merges and acquisitions will show that actual business people in the world think companies are worth more than the stock is selling for, as this is what broke the fall of the crash of ‘87.
5. Lower Stock & Gold Prices
Cramer said this market needs to see stocks that don’t buckle on assaults from high-frequency traders as well as stocks that immediately bounce back because there are so many that yield above 4%.
Gold also needs to show the market that it isn’t just one way and that it is possible for the precious metal to decline. The recent hike in gold is basically a thermometer for the market. A true reversal in gold will help us find our footing.
6. Europe Steps Up Its Game
Cramer said the international markets need to see Europe step and say they’re prepared to bail out anyone necessary and that no more Lehman’s will be tolerated. They also need to insist that banks raise more equity.
7. ICE Brent Crude has to go Below $100
Inflation is made possible by the burning of food for fuel and Brent Crude prices being so high. Cramer said it doesn’t help that governments have refused to press for higher margins on oil futures.
8. China Stops Raising Rates
Upon the drop of ICE Brent Crude prices, Cramer said China needs to admit they’re seeing much better inflation inputs and that they’re done raising rates for a while.
9. Euro Gets a Makeover
The region has been suffering mainly due to a lack of fiscal cohesion, which has been the biggest issue facing the 17 nations that share the currency.
10. Stock Leaders Reach 52-Week Highs
Jim Cramer said we need to see some stock leadership from the likes of traditional leaders such as Apple (AAPL), Deckers Outdoor (DECK), Chipotle Mexican Grill (CMG), etc. in order for a true recovery in the stock market and economy alike to take place.