CNBC's Jim Cramer on Wednesday explained what the Fitch Ratings debt downgrade might mean for investors and the market as a whole.
Cramer said he knows moves like these can cause Wall Street to panic and start selling, especially stock of companies that trade based on their future prospects.
He used semiconductor company Advanced Micro Devices as an example, saying the company reported a positive quarter Tuesday night, causing its stock to spike. But after the downgrade, the shares lost ground. Cramer attributes this movement not to the problems with AMD or its fundamentals, but to a harried reaction to the downgrade.
"Will people react in fear to the Fitch downgrade beyond today? I think we won't really get all that much follow-through," Cramer said. "I'm not concerned about the Fitch downgrade," he continued. "I am concerned that too many people remain too sanguine at the moment, because that's not what we want to see. When you get too many bulls, it tends to eventually cause a nasty sell-off — so maybe some fear and some loathing are just what's called for."in the market that he finds concerning, and he advised investors to curb their bullishness, raise some cash and wait.
"I am saying that the action today was so severe and the sell-offs in tech so vicious, that it's worth waiting to see if we can get some sort of bottom that's based purely on fear and loathing out in the future," he said.
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