CNBC’s Jim Cramer said Wednesday he’s seeing multiple signs of “absurdity” in the stock market right now, making it a bit challenging for investors to fully make sense of daily trading.
The “Mad Money” host said one example is the way in which the price of natural gas is, essentially, impacting the performance of technology stocks. The rising price of natural gas is playing a big part in the recent move higher in bond yields, Cramer contended, because it plays into investors’ inflation concerns. And the move higher in bond yields is making technology stocks fall out of favor on Wall Street, he said.
“Of course, when a linkage gets this attenuated it makes you wonder if the market has completely lost its mind. Do we really believe Apple‘s stock should rally if natural gas falls from $6 to $5.50?” Cramer asked rhetorically. “Apple’s market capitalization might literally grow by $50 billion if natural gas breaks down below $5.50, even though there’s no direct connection. But, like it or not, that is how this market works, at least for the moment.”
“It’s not just the tech-natural gas linkage; this market’s full of absurdity,” Cramer added.
He said another example is the performance of Warby Parker shares in their market debut Wednesday. The eyeglass maker went public via direct listing and the stock closed at $54.49, up 36% from its $40 reference price.
That gives the company a valuation of more than $6 billion, which Cramer described as “lunacy.” On Tuesday, Cramer told “Mad Money” viewers he likes the company, but he’d “steer clear” of the stock unless it traded well below its reference price.
“Last year, Warby Parker raised a bunch of money at [a $3 billion valuation] and almost nothing has changed since then,” Cramer said Wednesday. “So either the people who got in on that last round of private fundraising are some of the savviest investors in the world, or the people buying it up here today are a bunch of suckers. I’m guessing the latter.”