CNBC host and veteran market commentator Jim Kramer is raising the alarm bell following President Donald Trump’s sweeping tariffs announced on April 2.
“If the president doesn’t want to reach out and reward these countries and businesses that play by the rules, the scenario in 1987… the scenario that fell 22% on Monday and 22% is the most enthusiastic,” Kramer refers to the historic day collapse of the Dow Jones overall average. “We don’t have to wait too long to know, we’ll know that by Monday.”
Black Monday refers to the crash of stock markets around the world on October 19, 1987 in just one day. That was 22.6% led by the Dow Jones Industrial Average, the worst day-percent drop in history.
The combination of rising interest rates, high ratings, geopolitical tensions and fears about the rise of computerized programme trading has created a complete storm. Once sales began, the algorithm triggered more sales, leading to snowball effects.
On April 2nd, Trump announced a 10% blanket tariff on all imports. The strict taxation of certain countries is scheduled to come into effect on April 9th. In response, China imposed retaliatory tariffs, reinforcing global fears about a long-term trade war.
The market was not kind to the news. The Dow scored 2,231 points on Friday after dropping 1,679 points on Thursday. This marked the worst slide in two days since the beginning of the Covid-19 pandemic. The NASDAQ dropped 962.82 points (5.8%), while the S&P 500 fell to 322.44 points (5.97%).
“It’s difficult to build a new, weaker world order on the spot,” Kramer said. “I’m desperately trying to do it, but I haven’t seen anything that takes the 87 October scenario from the table yet. The one who fishes at the bottom is sleeping with the fish…”
Still, Cramer pointed out a strong employment report as a possible buffer. “It’s less likely that a crash will inevitably lead to a recession.”
“I will hold back my anger, but I was fine in the end, just because I spent 87 years. I was holding cash because of the crash.
In January, Cramer introduced Bitcoin, drawing a line between the asset itself and its biggest corporate advocate. “If you want to own Bitcoin, then (you) own Bitcoin,” Cramer told the caller. “I own Bitcoin. I need to own Bitcoin. Bitcoin is great to have in your portfolio.” But then his sharp distinction came: “But it’s not micro-strategy,” he said.
