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Bonds take control, prevent stocks from ending their slump

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Bonds take control, prevent stocks from ending their slump

Jim Cramer from CNBC emphasizes the significance of the bond market in relation to the stock market, stating that stocks are currently dependent on bonds. Cramer uses spice and flavor maker McCormick as an example, explaining that the perception of the company’s stock has been negatively impacted by the movement of bond prices. Cramer believes that stocks cannot rise until bond prices increase and yield rates decrease.

According to Cramer, the rise in rates and bond prices has led investors to devalue stocks compared to when rates were lower. He admits that the bond market may seem uninteresting, but highlights its inverse relationship with the stock market. Cramer uses McCormick as a case study, noting that despite the company’s decent performance in the latest quarter, its stock fell significantly. He attributes this decline to the relentless selling pressure caused by the bond market’s influence on stock prices.

Cramer concludes by stating that the bond market’s actions have overshadowed McCormick’s positive attributes and affected its valuation. He suggests that until bond prices stabilize, stocks will continue to be at the mercy of the bond market and are unlikely to rally.

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