Cramer: This market has eerie parallels with 2018. Here's what investors should do — SkimNews
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- Jim Cramer flagged 'eerie similarities' between today's market and fall 2018, pointing to rising oil prices, stubborn inflation, and higher interest rates as warning signs heading into year-end.
- Both 2018 and 2026 saw strong second-year-of-Trump-term stock gains alongside rising oil prices, climbing Treasury yields, inflation above the Fed's target, and a new Fed chair weighing further rate hikes.
- The S&P 500 fell roughly 20% from its late-September 2018 high through Christmas Eve that year, driven by fears over rising rates and escalating trade tensions with China.
- Today, oil sits near $100 per barrel, the 10-year Treasury yield approaches 5%, and inflation remains above the Fed's target, putting pressure on new Fed Chairman Kevin Warsh as investors anticipate a potential rate hike.
- Cramer stopped short of predicting a repeat collapse, arguing Warsh appears less aggressive on inflation than former Chair Jerome Powell was in 2018 and that investors now better understand how Trump responds when his policies pressure markets.
- Cramer's playbook: trim winning positions, keep cash on hand, and use any market weakness to buy high-quality stocks rather than panic-selling.
Why it matters: Cramer is telling investors that the macro cocktail—oil near $100, 10-year yields near 5%, inflation above target, and a new Fed chair—already produced a 20% S&P 500 drawdown in Q4 2018, so even without a full repeat, heightened volatility likely favors investors holding cash and ready to buy dips in quality names rather than those fully exposed to rate-sensitive positions.
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