Jim Cramer, expert who predicted ‘Black Monday’, warns recession ahead, urges investors to do THIS

Jim Cramer, the expert who predicted 'Black Monday,' says a recession is likely, but urged investors to desist from panic selling. The comments follow a sharp global market selloff, with Asian markets particularly hard hit on Monday in response to President Donald Trump's tariff plans.

What Crammer said on recession?

Cramer asserted that the tariffs pose ‘real trouble’ for US economy, but that does not indicate an imminent Great Recession as institutions are still strong.

“We don’t believe that the whole economic system’s in jeopardy. We don’t believe that major banks will fail. We definitely don’t like the situation, for heaven’s sake, and it’s likely we’re headed for a recession because of the president’s ill-advised plans. But we’ll pull out of it one way or another,” CNBC reported quoting Cramer.

Crammer says Trump can calm the stock market. Here's how?

Cramer said Trump could calm the stock market easily if he chooses to. But being open to negotiation is crucial. He added that for Trump’s tariff strategy to work, he must do three things at once: control inflation, strike new trade deals quickly, and keep jobs steady.

“I think if he doesn’t get all three, he isn’t going to press his bet with these tariffs. Instead, he’ll find some reason to declare victory and roll them back, which is why the market didn’t collapse today,” Cramer said.

Cramer also said that investors might be in trouble if Trump focuses more on punishing China and forcing manufacturing to return to the U.S. than it is on retooling trade relations.

How US stock markets responded on Monday?

The S&P 500 slipped 0.2% at the end of a day full of heart-racing reversals as battered financial markets try to determine Trump’s ultimate goal in the trade war. The Dow Jones Industrial Average fell 349 points, or 0.9%, and the Nasdaq composite edged up by 0.1%.

All three indexes started the day sharply lower, and the Dow plunged as many as 1,700 points following even worse losses elsewhere in the world. But it suddenly surged to a gain of nearly 900 points in the late morning. The S&P 500, meanwhile, went from a loss of 4.7% to a leap of 3.4%, which would have been its biggest jump in years.

How Asia markets reacted on Teusday?

Asian markets opened higher on Tuesday, with Japan’s Nikkei 225 share benchmark up 5.5% after it fell nearly 8% a day earlier.

The Nikkei 225 jumped to 32,819.08 a half-hour after the market in Tokyo opened. Meanwhile, South Korea's Kospi gained 2%, and markets in New Zealand and Australia also edged higher.

Asian markets plunged on Monday, with stocks in Hong Kong diving 13.2% on their worst day since the 1997 Asian financial crisis.

(With inputs from CNBC and agencies)