Stocks tumbled Monday as concerns of slowing growth and accelerating coronavirus infections, along with the potential collapse of property developer China Evergrande, gripped global markets ahead of a crucial Federal Reserve policy meeting later this week.
Jim Cramer and TheStreet Senior Portfolio Analyst Jeff Marks talked about China's property developer Evergrande and other catalysts to Monday's selloff.
Evergrande
Chinese property giant Evergrande tumbled more than 10% on Hong Kong Stock Exchange, spooking Asian markets.
Bank stocks like Bank of America (BAC) - Get Bank of America Corp Report , JPMorgan Chase (JPM) - Get JPMorgan Chase & Co. (JPM) Report and Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report slid in unison amid a decline in bond yields on slowdown fears. Investors flocked to Treasurys for safety as the stock market is set for its biggest sell-off in months.
Cramer said it's almost humorous that U.S. bank stocks are down. "Our banks had been desperate to get into China to be involved in giving something like Evergrande Capital. We were shut out. Now the Chinese communists are commanding the economy, they will decide how much is going to be lost and who loses it," said Cramer.
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"People also interpret them as being some sort of democracy. There is a lot of disinformation about what goes on in China. China will figure out how much punishment needs to be meted out and then it will stop. And they'll bail out the people part of the common prosperity group. They have not lost track of this," he added.
Monday's Selloff
Cramer said there is going to be a downgrade by the S&P 500 and that's going to be the ultimate buying opportunity. "But remember you have a debt ceiling, a stalled reconciliation and you have China. Those are three big strikes. Now against that, you look for the J&J's [Johnson & Johnson] (JNJ) - Get Johnson & Johnson (JNJ) Report of the world, that have great balance sheets, and get ready [to buy]. But we're too early," he added.
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September 21, 2021 at 02:17AM
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Stock Market Today With Jim Cramer: Prepare to Buy What's Working - TheStreet
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