After trimming charitable holdings, Cramer reveals 7 stock market concerns going into earnings season

CNBC’s Jim Cramer on Tuesday revealed he recently trimmed holdings in his charitable trust ahead of earnings season as he grows more concerned about potential market headwinds.

The fund, ActionAlertsPlus.com, trimmed roughly $100,000 from its holdings in part because of the issues, he said.

“I’m not a bear, but there are legitimate concerns here, which is why we sold a bunch of stock for my charitable trust on the eve of that conference call I gave last week,” he said on “Mad Money.” “This market can handle one or even two of these potential problems, but it can’t handle all of them.”

Cramer laid out seven concerns that he has. Below are key takeaways that are driving his ambivalence:

Earnings results

“This week we have bank earnings and those stocks have run so much that their numbers need to be borderline perfect,” Cramer said. “Call me concerned that this red-hot group could hurt the tenor of earnings season.”

Inflation

“I think [Federal Reserve Chair] Jay Powell is right that the current inflation spike is transitory,” he said. “I don’t think we’ll have to tighten any time soon because of inflation, but I’ve been wrong before, and this is a legitimate concern even as the consumer price index numbers this morning don’t seem all that worrisome.”

Stock glut

“We’ve had so many IPOs and so many SPAC deals that I’m worried about the prospect of a $100 billion direct listing [from Coinbase] sucking money from everything else,” Cramer said. “Too much supply, too many questions, not enough discipline.”

Covid-19

“We’ve gotten complacent about Covid,” the former hedge fund manager said. “I know people are sick of quarantining, and vaccinations — save [Johnson & Johnson] — [are] going pretty well, though we’re not out of the woods.”

S&P oscillator

“We are indeed overbought on the S&P oscillator that I swear by,” he said. “We’ve had an incredible run, and I’d feel much, much more comfortable if we follow that up with a gentle decline rather than some sort of cliff jump. The longer the market stays overbought, the more worried I get.”

Semiconductor shortage

“These shortages really do worry me, especially the semiconductor shortage. Without chips, there isn’t anything most manufacturers can do to boost production,” Cramer said.

Foreign policy

“We have a new president and it feels like everyone, from Iran to North Korea to Russia and even China, wants to test his resolve. I’m most worried about China, which seems determined to show Biden that it doesn’t want to hear anything about human rights or it will make a move on Taiwan,” he said. “To me, this potential flashpoint is the most dangerous storyline in the world right now.”