Cramer on buying stocks rising after inflation scare shakes the market

Jim Cramer, of CNBC, advised that market players have two ways to approach high-flying growth stocks that have faltered and faltered through a volatile session on Wall Street on Tuesday.

Investors may choose to join the sale that has dropped some technology names like Apple into negative trading territory this year.

The other choice – taking a cue from Federal Reserve Chairman Jerome Powell’s reaffirmed commitment to keep interest rates low – is to keep the race going and consider charging stocks worthwhile from their highs, Cramer said after the market closed mixed.

“After returning from this late afternoon, it’s not too late to sell more expensive shares, if you want,” said the Money Money host. “But in terms of better growth stocks, down more than 10% from their highs, I call myself a buyer. Not all of a sudden, not big, but still a buyer in any retry from that 9:47 the morning I saw today. “

Cramer’s assessment of the current state of the market follows a day of roller-coaster trading in which major US averages returned from session lows. The market suffered a steep sell-off in the morning, with the Nasdaq Composite falling nearly 4% to its lowest level before the Dow Jones and S&P 500 made modest gains at the close.

Dow advanced over 15 points to 31,537.35 for a 0.05% increase. The S&P 500 ended 0.13% higher at 3,881.37 to end its five loss. The technically strong Nasdaq could not gather enough for a positive day, falling 0.5% to 13,465.20, extending Monday’s losses.

“I’m glad to see the idea that you have to call the register here, but I happen to like growth stocks in a fright of reflection. I like growth stocks when the risk is active. I like growth stocks when the risk is off “Cramer said.

“If you want to keep your stocks growing … you have to be prepared to suffer something, just like at the end of 2015 and the beginning of 2016 – this was the last great time to buy these stocks – or you can just make sales. if you want and try to get back to a lower level, “he added.

The market struggled through a rotation as investors shifted growth and technological stocks that outperformed the pandemic to the value games of companies expecting to see business return as the economy reopens. The Nasdaq is now with a 4.5% discount on the maximum closing level earlier this month.

Concern that a revival of inflation could cause the Fed to raise interest rates, as it has done twice over a three-month period between 2015 and 2016, has shaken investors from rising stocks in recent days, Cramer said. . Higher rates are a challenge for growth and utility stocks.

Stock prices in Apple, Salesforce and ServiceNow fell by at least 3% this week.

However, in an appearance before Congress on Tuesday, Powell told lawmakers that inflation remains “soft”, the labor market faces ongoing challenges and that the central bank has been engaged in its current monetary policy.

This reassured investors about interest rates, helping the market to recover some losses.

“This time our Fed chief has promised to resist rising rates – too many unemployed – but there will come a time and a time when these rising stocks will be somewhat hopeless,” Cramer said. “They’ll look like they did today … before people came in to buy.”

Correction: This story has been updated to reflect the correct number of Dow points advanced.

Disclosure Cramer’s Charitable Trust owns shares in Apple and Salesforce.

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