CNBC personality Jim Cramer shredded investors who bought stocks ahead of a hotter-than-expected September inflation report that immediately fueled a major selloff.

Stock futures had traded higher earlier Thursday morning on a report that the British government was reconsidering a widely criticized plan to slash taxes. But those gains were lost and the Dow opened several hundred points lower after the latest Consumer Price Index showed stubbornly hot inflation.

“What clowns thought this was gonna be cool? It’s wages, food and housing. We’ve made no progress whatsoever,” Cramer said. “So those who are buying stocks and don’t realize futures are going to take all the stocks down are just beyond my ken. I don’t know what they’re doing.”

“And the people who bought stocks based on Britain, they’re even more stupid than the people who bought stocks betting on the CPI being cool. Honestly, I just don’t know what to say, how people could be so wrong,” Cramer added.

Inflation increased by a higher-than-expected 0.4% from August to September and ran at 8.2% compared to the same month one year earlier. Both numbers were larger than expected and indicated the Federal Reserve’s series of sharp interest rate hikes have yet to have the desired effect on the economy.

Core inflation, which excludes volatile food and energy prices, jumped 6.6% — the highest reading of its kind in four decades.

The Dow Jones Industrial Average was down more than 260 points as of about 10 a.m. ET. The tech-heavy Nasdaq was down more than 300 points and the broad-based S&P 500 was down approximately 80 points.

Inflation hit 8.2% in September.
Food prices
Food and rent prices have spiked to four-decade highs.
Jim Cramer
Jim Cramer said investors need to be patient before trying to buy the dip.

Cramer argued the time to “buy the dip” will eventually arrive – but not until the market sees concrete signs that inflation has moderated.

“Don’t do it yet. Don’t do it until you see some progress in wages or food or housing,” Cramer said. “These are the stuff that we all see every day.”

The CNBC personality asserted that misguided “nameless” hedge funds were responsible for the false rally in stock futures ahead of the inflation report.

“These people are so not making the playoffs,” Cramer quipped. “I would fire the coaches of every single one of these funds who are buying. But we don’t know who they are – they’re nameless.”

“It was wrong to think that this was going to be a cool number,” he added. “It just was wrong and that’s OK. People make mistakes and they made a lot of mistakes and they’re going to lose money and they should have waited and they would’ve gotten better prices. But no, they had to jump the gun.”


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Tyler Cowan