CNBC’s Jim Cramer on Friday warned that Wall Street could witness multiple trading weeks that turn out to be “worse than the depths of the Great Recession.”
The United States is facing a “two-front war” with the coronavirus outbreak and a looming global economic crisis, which is compounded by the state of the oil market, the “Mad Money” host said.
The U.S. West Texas Intermediate fell 11% to $22.43 per barrel, suffering its worst week in nearly three decades and tracking toward its worst month in nearly four. As the fast-spreading virus forced multiple countries to lock down, crude demand has cratered and a price war between Saudi Arabia and Russia continues to play out. That places more pressure on the U.S. oil industry.
Cramer called it the “dumbest price war in history” and was sanguine that President Donald Trump could intervene to get crude prices back above $30 and avoid layoffs in the oil patch.
“If the president does call the Saudis and reads them the riot act over the weekend, that could prop up the price of crude,” he said. “The Saudis want us hooked on their cheap oil again, but that’s a pipe dream.”
With OPEC+ production cuts set to expire in less than two weeks, Saudi Arabia threatens to expand crude production to 12.3 million barrels per day and further strain the price of oil.
In the stock market, losses accelerated into the close Friday, capping the worst week since 2008 for the Dow Jones Industrial Average. The index fell 913 points, or 4.6%, to finish at 19,173.98, down 17% for the week. The S&P 500 declined 4.4%, and the Nasdaq Composite declined 3.8% on the session.
“We know this market is the most oversold it’s ever been. We know that if there’s any good news — a clinical trial success, more testing, a cresting of new cases in Italy or Spain, a $3 trillion stimulus bill, or oil back, let’s say, at $26 — the averages would roar,” Cramer said. “But, somehow, all those positives, they seem to have become long shots.”
After a brutal trading week, Cramer unveiled the earnings reports and newsworthy events he has circled on his calendar next week. All earnings estimates are based on FactSet estimates.
Tuesday: Nike earnings
Nike reports earnings for its fiscal 2020 third quarter after the market closes. The stock is down 36% from its Jan. 22 high.
- Projected revenue: $9.8 billion
- Projected earnings per share: 60 cents
“China’s now back online, and maybe people are ordering shoes and apparel online,” Cramer said. “Here’s what you need to know: Nike’s the first big-cap company to report in the era of [COVID-19] destruction, or at least the first one that the analysts actually like. So let’s see what happens.”
Wednesday: Paychex, Micron Technology earnings
Paychex reports earnings for its fiscal 2020 third quarter before the morning bell. The stock is more than 42% off its Feb. 20 high.
- Projected revenue: $1.1 billion
- Projected EPS: 96 cents
“[W]e have to expect more small business closures than at any other time since the Great Depression. Lack of clients,” the host said. “I think it’s going to take some time for this to unfold, but the market isn’t waiting around to find out.”
Micron Technology reports fiscal 2020 second-quarter earnings after the closing bell. Shares are down 41% from its Feb. 12 high.
- Projected revenue: $4.69 billion
- Projected EPS: 37 cents
The commodity chipmaker’s results will explain “how bad the supply-demand imbalance is. Things had gotten tight when the stock soared to $60 a little more than a month ago,” Cramer said. “Micron could bounce if we get positive economic data, but that seems incredibly unlikely.”
Thursday: Signet Jewelers, Lululemon earnings
Signet Jewelers reports fiscal 2020 fourth-quarter earnings prior to the market open. Shares have tumbled 75% from their Jan. 16 high.
- Projected revenue: $2.1 billion
- Projected EPS: $3.50
“This company was experiencing a long-awaited and deserving comeback before the coronavirus devastated all things retail,” Cramer said. “Welcome to the pawn shop era.”
Lululemon Athletica reports earnings after the closing bell. The stock declined 38% from its highest trade on Feb. 20.
- Projected revenue: $1.38 billion
- Projected EPS: $2.25
“If you want to bet on Lululemon, please wait until Thursday to buy it,” Cramer said. “I expect you’ll get a better entry point, because on Thursday morning we get jobless claims and they’ll be more frightening than anything Steven King’s ever written.”