Impulse stocks such as Tesla, Zoom and SPACs are stagnant

The same stocks that attracted investors to the stock market last year left newcomers cold, said Jim Cramer of CNBC.

“The house of pleasure has walls made of traditional stocks that are kept under control, but the house of pain has collapsed,” said the host of “Crazy Money”.

Cyclical stocks that are geared toward the wider economy have caught fire and driven the stock market to new highs, Cramer said. He pointed to stocks such as Emerson Electric, Ingersoll Rand, Honeywell, PPG, Home Depot, Lowe’s, JP Morgan Chase and Wells Fargo.

Each of these stocks, minus Honeywell, has outperformed the market so far. Wells Fargo, up 45%, was the strongest performer in the group.

“Then you have the second market, the one dominated by the younger cohort, which was attracted by commission-free trading, an easy-to-use Robinhood app and some very interesting actions that made people ‘fortunes last year,” he said. Cramer.

Shares of Tesla and Zoom have struggled to maintain momentum after raising attractive figures in 2020. Zoom has fallen by more than 8% this year and by 45% from its peak in October. Tesla shares have risen just 1% since the beginning of the year. The stock was last traded at USD 714.63, down about 21% from the end of January.

Cramer also said that many SPAC parts are included in the “house of pain.” Some of these include QuantumScape, Nikola and Lordstown Motors, which have seen shares fall between 32% and 63% this year.

Disclosure: The Cramer Charity Trust holds shares in Honeywell.

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