CNBC’s Jim Cramer blasts ‘clowns’ who bought stocks ahead of inflation report

CNBC personality Jim Cramer shredded investors who bought stocks ahead of a hotter-than-expected September inflation report that immediately fueled a major selloff — only for markets to rally sharply and prove the analyst wrong.

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 the market briefly gave up those gains and opened 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 Thursday morning while watching stocks sell off on the inflation data. “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.

Cramer’s sharp criticism proved to be off-base by midday as stocks posted a surprise rebound. After opening down more than 200, the Dow Jones Industrial Average rallied more than 800 points to close at 30,038.72.

The tech-heavy Nasdaq was up 232 points and the broad-based S&P 500 rose 92 points.

Cramer has yet to react to the reversal.

Earlier in the day, 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 initial 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.”