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Jim Cramer Blames Faulty Predictions for Recent Market Downturn

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Market Downturn,Jim Cramer,Federal Reserve

CNBC's Jim Cramer attributes the recent market decline to overly optimistic predictions from both companies and the Federal Reserve. He argues that companies should only make predictions if they are confident in their accuracy and advises against exceeding expectations. Cramer criticizes the Fed for suggesting two rate cuts next year instead of four, leading to disappointment among investors. He also cites Micron's downbeat earnings call, where the company revised its PC business outlook, as an example of how unmet expectations can impact stock prices.

CNBC's Jim Cramer reviewed recent market action, saying some of the downturn over the past several sessions was due to faulty predictions.

"Companies, and even the Fed, should not make predictions unless they know that the predictions are well within reach," he said."No one ever held it against you for being too conservative with your guidance."on Thursday reviewed recent market action, saying some of the downturn over the past several sessions was due to faulty predictions."Companies, and even the Fed, should not make predictions unless they know that the predictions are well within reach," he said.

According to Cramer, unmet expectations and aggressive guidance drove some of the recent sell-off. The averages have tanked as of late, and theInvestors were disappointed by commentary from the Federal Reserve after it cut rates by 25 basis points on Wednesday, Cramer said. The cut was widely expected, but Wall Street balked when the central bank indicated it intended to make two cuts next year, instead of the four cuts it teased a few months ago.

"In the world of Wall Street, if you make a prediction, you better beat it, or else your stock's going to get clobbered," he said.Jim Cramer explains what makes up the market's big picture today

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