Cramer Warns of 2018 Repeat: Trimming Stocks as Oil and Rates Climb

Market expert Jim Cramer sees parallels between current market conditions and those that led to the brutal stock selloff in 2018. On his CNBC show, Mad Money, he mapped out the similarities investors are watching.

In both periods, the second year of a Trump term, stocks rallied hard before falling. Oil prices and Treasury yields climbed in 2018 and are rising again now. Inflation also sits above the Federal Reserve’s target in both periods.

The S&P 500 fell roughly 20% between its September peak and Christmas Eve in 2018, but recovered quickly after Fed Chair Powell cut rates three times. The index closed 2019 up close to 30%. This time around, investors are watching the 90%+ rate hike odds for this month’s Fed meeting.

Cramer advises trimming winning positions and raising cash, not selling everything. His own Charitable Trust has pushed cash into the mid-teens as a share of the portfolio, giving him room to buy quality stocks back if prices fall.