The stock market has climbed a pretty sizeable wall of worry over the last two weeks, with the S&P 500 rising 8% during a period of continued war in Ukraine and Federal Reserve rate hikes.
Jim Cramer, the CNBC commentator, seemed to be in a triumphant mood on Friday.
“There are 600 companies that came public in the last 18 months. There’s like seven of them that trade north of nine bucks. This is the bear market, just like 2001, except for we have rates much lower,” he said.
“You remember those days, those companies were all jokes,” he continued. “I’m looking at all the companies under $10, many of them are actually making money. We are in some weird market, that is a bear market, and that no one called it as a bear. And I think the bear market is over.”
So, that’s a lot to unpack. The generally acccepted definition of a bear market is one where prices have dropped 20 or more from a recent high. That occurred first in the small-cap Russell 2000
and then the tech heavy Nasdaq Composite
though not the S&P 500
Cramer’s reference to stocks under $10 is a reference to special purpose acquisition companies, that are typically priced at that level. According to Tuttle Capital Management, there were 613 SPAC IPOs last year, and another 52 so far this year. Companies that de-SPACed — that is, merged with a target — have seen an average return of -33.7%, according to the Tuttle data.
On social media, the talk was of whether Cramer has just jinxed the market.
U.S. stock futures
were indeed a little bit weaker on Monday.