Cramer says investors should accept market weakness and ‘just wait’ for rate cuts

CNBC's Jim Cramer on Monday told investors they should come to terms with some weakness in the market as they wait for the Federal Reserve to cut interest rates.
"Your best bet is to accept the degradation and just wait," he said. "There are now brown shoots everywhere and, frankly, I think it's exactly what the bulls need, as long as Jay Powell sees the weakness and knows that it can still be corrected."

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On a mixed day for the major indexes, CNBC's Jim Cramer on Monday told investors they should come to terms with some weakness in the economy as they wait for the Federal Reserve to cut interest rates.

"Your best bet is to accept the degradation and just wait," he said. "There are now brown shoots everywhere and, frankly, I think it's exactly what the bulls need, as long as Jay Powell sees the weakness and knows that it can still be corrected," referencing Fed Chair Jerome Powell.

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Cramer suggested that bullish investors sometimes want incompatible scenarios — weakness in the economy but not in the companies they're invested in. Or, they want rate cuts even if inflation is only "somewhat under control," he said, adding it's not possible to have a weaker economy with lots of companies turning out massive profits.

The weaker-than-expected Manufacturing PMI released on Monday was a big overhang on the market, with investors concerned about the strength of the economy. Cramer said these results could be a harbinger of interest rate cuts and also reminded investors that Friday's nonfarm payroll report for the month of May is vital data for the Fed.

"When you read the statement for the Manufacturing PMI, it is weak, weaker than feared. That will cause inflation to cool," he said. "And that's ultimately what could sway the Fed — particularly if we get any sort of job weakness on Friday's numbers."