Jim Cramer says to ‘hope for the perfect, put together for the worst’ forward of October CPI report

CNBC’s Jim Cramer on Tuesday gave traders his expectations for October’s client value index report.

“Possibly this time will probably be completely different, and it could possibly be. … However proper now on the subject of the CPI, I feel we’re in a hope for the perfect, put together for the worst scenario,” he stated.

The patron value index measures costs customers pay for quite a lot of items and companies. Traders will probably be looking forward to any indicators that inflation is cooling down within the report, which is about to be launched Thursday morning. 

The October CPI studying might give clues on whether or not the Federal Reserve will modify its tempo of rate of interest hikes subsequent month. The report additionally has implications for the inventory market, which is already jumpy this week attributable to Tuesday’s midterm elections.

“We’re all nervous in regards to the client value index — each time this key inflation quantity is available in too sizzling, rates of interest soar and shares plummet,” Cramer stated, including that many inputs for the report together with meals and vitality are already too excessive.

However what’s most regarding to Cramer is that present CPI estimates do not appear to issue within the a number of value will increase firms have carried out. 

“What I do not perceive is how the consensus merely can not seem to take these increased costs into consideration. The numbers at all times appear to come back in too low, just like the individuals who put the forecasts collectively have by no means been to a grocery store,” he stated.