The Standard & Poor’s 500 Index has fallen 7 percent from its May 2 high amid concern about the slowing U.S. economy and Greece’s debt crisis. The decline may extend a bit further, but no plunge is in the offing, says CNBC stock-picking star Jim Cramer.
“Can a 10 percent correction happen?” he asks. “We’re down 7 percent, another 3 percent — Will we feel that? Of course.”
Cramer notes that many blue-chip cyclical industrial stocks have dropped 15 to 20 percent from their highs. “I think it’s entirely possible we go down a little more. Do I think it’s catastrophic?”
No is the answer, he says.
(Getty Images photo)
Cramer says the U.S. economy is in better shape than it was during last year’s Greek debt crisis. In addition, the recent decline in oil prices – they’re down about 17 percent from their April peak – provide support, he says.
One sector of the stock market Cramer doesn’t like is banks.
“I completely and utterly despise U.S. banks,” he says. “This is a group Washington doesn’t like. It’s a group people feel like anytime someone does well, it’s at the expense of the consumer. It’s not an investable group right now.”
Cramer’s not the only one who’s still optimistic about stocks in general.
Birinyi Associates Inc.’s Jeffrey Yale Rubin said his firm is bullish on equities this year, leading managers expressing optimism that six straight weeks of declines in the stock market and weak economic data will be reversed in the second half.
Rubin recently said at the Bloomberg Money Managers conference in Boston that his firm’s long-term target for the Standard & Poor’s 500 Index is 2,100.
Bond managers Eric Stein at Eaton Vance Corp. and Ken Taubes of Pioneer Investment Management Inc. said the recent slowdown in the economy was temporary and they weren’t worried that U.S. lawmakers would block raising the debt limit. BlackRock Inc.’s Dan Rice said oil prices, which hurt consumers this year, will come down.
“For the remainder of the year, we’re positive,” said Rubin, director of research at Westport, Connecticut-based Birinyi Associates, which analyzes historical charts and patterns to make forecasts.
© 2014 Moneynews. All rights reserved.