Six reasons Jim Cramer is worried about the stock exchange in September

CNBC’s Jim Cramer stated Wednesday he sees a variety of uneasy aspects that are most likely to add to market volatility in September, beyond simply the truth it is a traditionally difficult month for stocks.

Here’s what the “Mad Money” host is worried about:

This week, 3 business– paint makers PPG Industries and Sherwin-Williams, in addition to homebuilder PulteGroup– released pre-announcements to lower assistance about their existing quarters, cautioning that supply chain issues and products expenses are triggering difficulties that might cause worse-than-expected outcomes.

“The good news? None of their stocks got crushed because demand’s still in good shape. … They’re still getting business,” Cramer stated. “The bad news? These supply problems, they’re not going away—seems like they’ve become ingrained.”

Pressure on Federal Reserve Chairman Jerome Powell to alter his position that inflationary pressures are temporal might heighten throughout September, Cramer stated.

While that perspective is why the Fed’s extremely accommodative financial policy stays in location, Cramer stated that “after these preannouncements where we keep hearing about rising raw costs, don’t you have to wonder if inflation is more intractable than they thought?”

Raising rate of interest would be the “magic elixir” to tamping down inflation, Cramer stated. “But they do that by destroying demand and that crushes earnings, which in turn crushes stocks.”

“If rates are headed higher, that creates more competition for high-yielding dividend stocks. These days, not many stocks are supported by their yields, but there will be even fewer if rates go up,” Cramer stated.

The “Mad Money” host stated there’s a little bit of a double-edged sword including the Democrats’ desire to pass their $3.5 trillion budget plan reconciliation plan.

That level of costs would definitely develop tasks and “supercharge the economy,” Cramer stated, however it comes at a time when there’s currently more than 10 million task openings in the U.S. As an outcome, salaries would likely increase as business defend employees, he stated, “which is good if you work for a living but bad if you own stocks.”

“However, if that big stimulus package gets killed, the investors who are depending on it and what it would do to companies they own, well I’ve got to tell you, those people would be disappointed. Without this, you can’t prop up the cyclicals,” Cramer stated.

New business going public through unique function acquisition business or conventional IPOs are including supply of stocks to the marketplace, which can serve “as a wet blanket dousing the fire of the buyers,” Cramer stated.

“Of course, this IPO cycle will eventually play out like they always do: with a sell-off that lowers all prices to levels where stocks are more attractive,” Cramer stated. “We can’t seem to stop this deal flow.”

Cramer stated he stays worried about China and the unpredictability of President Xi Jinping, especially as it connects to Taiwan, which plays an important function in the international semiconductor market.

“Here’s the bottom line: At the end of the day, I think we can deal with any of these issues, but not all at once—at least not without lower stock prices,” Cramer stated. “And lower stock prices is what September is all about.”