Cramer’s Mad Money Recap 5/18: Target, Walmart

Jim Cramer cautions that knowing when the bottom has arrived and knowing when to buy back into the market is never easy. Don’t risk missing out.

Is it finally time to sell everything and wait for the selling to subside? Jim Cramer told his Mad Money viewers Wednesday that despite the day’s monster 1,100 point decline in the Dow Jones Industrial Average, knowing when the bottom has arrived and when to buy back into the market is never that easy.

Cramer’s mantra has always been to never stop investing. There were only two times in his entire career where selling everything made sense, and this isn’t one of those times.

The reason it’s so hard to trade in and out of selloffs is because there are too many moving parts. Many of the stocks seeing the biggest declines, like Target  (TGT) – Get Target Corporation Report and Walmart  (WMT) – Get Walmart Inc. Report, will do a lot better once inflation is under control. The only problem, inflation is everywhere.

The Federal Reserve is battling inflation in housing, but demand won’t decline enough to meet supply until mortgage rates hit 7% or 8%. Autos also need higher loan rates to give semiconductor makers a breather. Then there’s labor, which will require companies to start laying off workers before inflation will cool.

One of the biggest drivers of inflation remains the war in Ukraine, which is pushing up both food and oil prices. Neither of these are in the Fed’s control. There’s also freight costs, travel and a glut of stimulus savings that consumer still need to work off.

Fed chair Jay Powell needs to slay all seven of these inflation dragons, Cramer concluded. Exactly when that will happen is anyone’s guess, which is why you can’t risk selling everything and missing the bottom.

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