Jim Cramer's 'Mad Money' Recap: What Really Moves Markets
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NEW YORK (TheStreet) -- It's an incredibly confusing time to be an investor, "Mad Money" TV show viewers. With such a flood of facts and data flowing from companies, analysts and government sources, it's increasingly difficult to figure out what matters and what doesn't, said Cramer. That's why his new book, Get Rich Carefully, aims to separate the over-hyped and unimportant from what really moves the markets.
The first tip from Cramer's book is on unemployment data. Every week the Labor Department releases jobless claims, but this number can largely be ignored, said Cramer. Also ignore a similar metric released by payroll processing giant Automatic Data Processing
So what really does move the markets? Cramer said the non-farm payroll numbers do. He said this number has historically had lasting effects on the markets. Bad reports send the markets lower, while good ones make bull markets soar. Bad reports followed by more bad reports multiple these effects.
Cramer said his bottom line to investors when investing on non-farm payroll day is to wait until 10 a.m. ET, after the shorts have covered their positions. Only then will the market take a breather, giving individual investors a chance to get a good price.
Forget the Fed Minutes
What's the most over-hyped market non-event out there? Cramer told viewers that without question it's the monthly release of the month-old Federal Reserve minutes. Cramer said while these minutes appear to be the Holy Grail of investment decision making, in reality these data points mean nothing at all to stocks.
By the time they hit the Street, these Fed minutes are over a month old, Cramer reminded viewers, and circumstances can change significantly over 30 days. That was certainly the case in early August 2007, the onset of what would become the Great Recession and the panic that almost took down our entire financial system.
But to listen to the Federal Reserve minutes from the month prior, everything appeared to be fine and the economy was humming along, Cramer noted. Meanwhile, the first casualty of the crisis, Bear Stearns, was only days away from collapse.
This dichotomy led to Cramer's infamous "they know nothing" rant on CNBC on that Aug. 17. The Fed desperately needed to cut interest rates, he contended, but remained totally asleep at the wheel.