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Stock Market Today With Jim Cramer: August Trading and Square

Jim Cramer warns of the August swoon and says that he believes Square's purchase of Afterpay is 'an overpay.'

Stocks rose Monday but came off earlier highs that were propelled by solid corporate earnings and dealmaking.

TheStreet's Jim Cramer shared his concerns about trading during August and his views on Square's  (SQ) - Get Free Report $29 billion takeover of Australia's Afterpay.

Cramer: 'There's always a swoon.'

While Julius Caesar was warned about the Ides of March, Cramer told Action Alerts PLUS senior analyst Jeff Marks that August makes him nervous.

"I don’t like August," he said. "There’s always a swoon. And anybody who remembers 1987 knows there was a swoon in mid-to-late August that just crushed you."

Traders should take a little off, Cramer advised, while investors should "maybe wait until you get prices, unless your stock has been hit."

"Now if your stock’s been hit, you’re a little immunized," he said. "It’s kind of like COVID. You immunized the wrong way."

Cramer also reiterated his support for Federal Reserve Chairman Jerome Powell.

"You never hear anyone say that he’s OK," Cramer said. "I think he’s OK, but I feel so alone in saying that Powell is doing it right."

Square's Afterpay Deal: 'An Overpay'

Cramer turned his attention to Square's announced purchase of Afterpay, a buy-now, pay-later company, in an all-stock deal that marks Square's largest acquisition to date.

Square, which also pre-announced stronger-than-expected second-quarter earnings, said it plans to integrate Afterpay into its existing Seller product for small businesses and its Cash App.

Cramer said he thinks the deal is an "overpay," but added that Wall Street thinks that Square can do no wrong.

"The Street feels there is no wrong that Square can do and yet they didn’t give PayPal any slack," Cramer said. "I think the subscribers and club members of Action Alert understand that while Square is a good company, PayPal is a great company."

Last week, PayPal Holdings  (PYPL) - Get Free Report offered disappointing guidance for its fiscal third quarter even as it topped earnings estimates for the second quarter but missed revenue forecasts.

"I just feel that when you buy a stock in an all-stock deal and you make a lot of money, that’s very lucky," Cramer said. "And sometimes it's better to be lucky than good. But if I owned Square I would take something off the table right here."

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