Cramer says it is a good time to start investing in stocks as the U.S. economy rebounds from Covid
CNBC’s Jim Cramer said Tuesday he believes it is a favorable environment for investors to get money into the US stock market.
Cramer said in Squawk on the Street that the front page of the Wall Street Journal Tuesday featured a selection of headlines about a rebound in air travel, cash reserves in banks and the encouraging factors fueling the hot real estate market.
“I mean the money comes here,” said Cramer. “When I hear that, I know people are going to say, ‘Wait a second. That’s a bad sign.’ Or they want to take the other side of the trade. “
However, Cramer said he continues to see the landscape differently, referring to an optimistic outlook given by Scott Kirby, CEO of United Airlines, earlier in the day on CNBC’s “Squawk Box”.
“I’ve listened to these cruise line improvements and how they can raise prices,” added Cramer. “I’ll come back and say you know what? It’s a good time to invest.”
Cramer’s comments came ahead of Tuesday’s strong start for the Nasdaq, which was solidly in the green at the start of the session. The Dow Jones Industrial Average and S&P 500, both of which closed at record highs on Monday, remained fairly stable on Tuesday morning.
The 10-year government bond yield, which hit a more than a year high of 1.642% on Friday, traded below 1.6% early Tuesday, adding some relief to growth stocks hurt by rising interest rates . Higher interest rates affect the value of future earnings and compress market valuations. Bond yields have soared this year as all the Covid pulses overheat the economic recovery and cause inflation.
For the past few weeks, Cramer has been advising investors to stay away from high multiple tech companies because of rising interest rates. It’s a view he reiterated on CNBC Monday, saying it was “the wrong place”.
Instead, the “Mad Money” host has favored companies that would benefit from reopening the economy, like those in the industrial sector, as well as names like Square that can benefit from Americans having another round of coronavirus stimulus checking and putting receive money in savings and investment accounts.
“It’s not that I’m bullish. It’s that people go somewhere and do things, and a lot has to do with things that weren’t done in the last year,” Cramer said on Tuesday, giving him reason to the assumption a stock like United Airlines can still go higher.
Disclaimer of liability