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CNBC’s Jim Cramer on Monday offered three reasons why tech companies, including companies with strong balance sheets, are feeling pain in the stock market.
The “Mad Money” host, who is taping his show from San Francisco this week, reiterated his warning against for-profit companies earlier this year, but he acknowledged that even financially sound firms are feeling the heat.
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He cites three reasons why this might be the case.
- The strong US dollar and the European energy crisis are making companies more frugal with their purchases. “Foundational companies develop products that customers can rely on in an increasingly difficult global economy,” Cramer said.
- The Federal Reserve may want to lower stocks. Cramer said the central bank wants inflation to come down at any cost, which means the market could get even worse.
- Individual performances of the company may be lacking. “I happen to think Adobe is a great company, but the business is declining,” he said.
Cramer added that the jury is still out on whether the technology will remain underpowered or if this is an opportunity to buy dips.
“But has the sale gone too far, or is this a rolling nightmare that won’t end anytime soon? I mean, that’s the question.”
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