“Big wins could be behind us for a bit”

CNBC’s Jim Cramer looked at the reasons for Thursday’s market pullback, saying it could be a while before Wall Street rallies again.

“The market is still too overbought and we’ve become too hopeful, and now reality, with its positives that are rewarded yet negatives that are punished, has set in,” he said. “So the time for big wins can be behind us for a bit while we recharge and put on our Panglossian rose-tinted glasses.”

Averages fell as investors anticipated Friday’s remarks by Federal Reserve Chairman Jerome Powell at the central bank’s annual conference in Jackson Hole. The S&P 500 decreased by 0.87% while Dow Jones Industrial Average decreased by 0.43% and Nasdaq Composite decreased by 1.67%. Thursday’s session is a departure from a recent streak of gains as the market recovers from a global meltdown that saw the Dow post its worst day in two years.

Cramer suggested the selloff was “overdone” because Wall Street “already anticipated the possibility of a rate cut in September.” He also wondered if investors were anticipating an expansion of democracy in November, which he said could lead to a higher corporate tax rate.

He also named companies that might have done well in a more generous market but saw their shares fall even after decent earnings reports, including Snowflake, Williams-Sonoma and BJ’s Wholesale.

“This market punishes the weak while rewarding the strong,” he said. “They stop making excuses for poor performance. In some cases, they don’t even embrace a good performance after the monster move we’ve had the last two weeks.”