The potential for the United States economy to reopen in a few weeks is now on the table, though it should be taken with a grain of salt, CNBC’s Jim Cramer said Tuesday.
After consulting with Larry Williams, the “Mad Money” host said the renowned market analyst and trader made one of the “boldest contrarian calls” he had ever witnessed as the coronavirus outbreak takes its toll on society. Williams believes that officials could be free to loosen restrictive measures by May 12, or three weeks from Tuesday.
“I’m still very worried about this pandemic … but the charts, as interpreted by Larry Williams, suggest that the future might be brighter than we expect,” Cramer said. “I hope he’s right, although to me this prediction seems like a real long shot. Who knows, though? Sometimes long shots pay off.”
The health crisis took its hold on the U.S. more than a month ago as Covid-19 diagnoses spread quickly throughout the country. Businesses were ordered closed and residents in the majority of states told to shelter in place as a means to contain the virus.
Williams based his timeline to begin relaxing shutdown mandates on the trajectory the virus took in countries such as Italy, Germany, South Korea and Iran, Cramer said. The outbreaks in those nations share a similar pattern, and it could be a sign that the U.S. could get the crisis under control within the next month, he said.
“Williams is not a wishful-thinking kind of guy. He’s a heavy-hitter,” Cramer said, “and his forecast [is] worth taking seriously.”
The trend in the aforementioned countries is that new daily positive Covid-19 diagnoses appear to have peaked, give or take, around the 32-day mark and saw a major decline over the next roughly 32 days, Cramer said. The correlations were found in both South Korea’s “top of the class” and Iran’s “bottom of the class” coronavirus response actions, he added.
After cases in the U.S. spiked on March 11, new daily counts appeared to have peaked on April 10 and gradually declined thereafter, notwithstanding the fact that widespread coronavirus testing is not available, Cramer said.
Williams argues the outbreak in the U.S. can be manageable in the coming weeks, which will allow individuals to begin venturing out into public again.
“My gut says this forecast is too optimistic, maybe way too optimistic,” Cramer said, “but Williams has such a strong track record that I thought it’s worth putting this idea out there.”
How to reopen the economy has been one of the biggest discussions lately as officials at the federal, state and local levels are at odds over approaching a post-pandemic world. States in different regions of the country have committed to working together to safely open businesses while mitigating another spike in disease contractions.
Projected reopen dates vary in different parts of the U.S. New York expects to begin opening businesses on May 15 at the earliest and Michigan on May 1. Georgia plans to let some businesses reopen on Friday.
Cramer has long warned that the U.S. economy could not restart until coronavirus testing was widely available, along with other safety measures put in place. The investment guru, however, in recent days has warmed up to the idea that getting to the other side could be closer than once thought.
“I’ve said someone needs to go first, although perhaps not as aggressively as the governor of Georgia,” the host said. “But while I remain skeptical, there might be some reason to be more optimistic.”