Jim Cramer: PPI Data Signals Rates Go Higher

Author:
Publish date:
Video Rating:
TV-G
Video Duration:
1:25

Stocks searched for direction in intraday trading Thursday as the July read of the Producer Price Index came in hotter than expected.

The Dow Jones Industrial Average was down 89.93 points, the Nasdaq Composite was down 8.95 points and the S&P 500 was down 3.75 points. 

PPI for final demand increased 1.0% in July, exceeding consensus estimates of 0.6%.

The data followed consumer price index, or CPI, data that came in better than feared Wednesday. CPI came in up 0.5% month-on-month to 5.4%, which Jim Cramer called the "principal reason" stocks were higher Wednesday.

Cramer told Action Alerts PLUS senior analyst Jeff Marks the July PPI read signals the Federal Reserve will begin tapering and raising interest rates. 

Cramer added that the current rate environment is disproportionately impacting higher-multiple stocks, citing the example of Bumble  (BMBL) - Get Bumble Report

"High-multiple stocks are under pressure. It's not your fault, it's not their [company] faults, it's the fault of rates," Cramer said. 

Cramer said that the current environment makes a balanced portfolio more important than ever. 

So what makes for a balanced portfolio? Cramer gave TheStreet Live viewers an inside look at the Action Alerts PLUS charitable portfolio, explaining the clubs barbell strategy. 

For example, AAP owns names like PayPal  (PYPL) - Get PayPal Holdings Inc Report and Mastercard  (MA) - Get Mastercard Inc. (MA) Report, but also holds onto more traditional banks such as Wells Fargo  (WFC) - Get Wells Fargo & Company Report and Morgan Stanley  (MS) - Get Morgan Stanley (MS) Report. "That's the barbell writ large," Cramer said. 

Recap TheStreet Live: Everything Jim Cramer Is Watching 8/12/21

Hear what Jim Cramer is only telling members of his Action Alerts PLUS investing club in Thursday's Daily Rundown. 

Related Videos