Democrats and Republicans in Washington have been deadlocked since late July after key March provisions of the $ 2.2 trillion CARES Act expired. The two sides widely disagree on the scale and scope of an additional relief plan, with Democrats pushing for more expansive legislation while GOP negotiators have pushed for a more limited bill.
President Donald Trump, who took executive action last month to expand aid to unemployed Americans, told a press conference on Wednesday evening that he would be prepared to support legislation of around 1.5 trillion. of dollars. House Speaker Nancy Pelosi, D-Calif., Has repeatedly called on Republicans to support a bill worth about $ 2 trillion.
On Wednesday morning, White House Chief of Staff Mark Meadows, one of the administration’s main stimulus negotiators, told CNBC he was “probably more optimistic about the potential for a deal over the next few months. 72 hours than I have been in the last 72 days ”.
Cramer warned that without further stimulus for the U.S. economy, devastated by trade restrictions aimed at limiting the spread of Covid-19, the stock market rally from its pandemic March 23 low could be at risk.
Tech stocks, which have been the main driver of the market rebound, have seen weakness this month, briefly pushing the Nasdaq last week into a correction, falling more than 10% from its September 2 high. Tech stocks fell again on Thursday.
Cramer reiterated Thursday, before the stock market opens, that investors are likely to take profits in the tech even if a stimulus bill is approved. “It is enough to reduce exposure to the most technological stocks,” he suggested.
Also on Thursday, Cramer worried about the signal that the doubling of Snowflake stock on the first day of trading sends across the market.
“I think the amount of money institutions had to spend to be able to get their second half of Snowflake after getting their first part on the IPO shows that there is very little discipline.” , Cramer said earlier on “Squawk Box. “” That doesn’t bode well. “