Money managers are locked into the reopening trade, and retail investors should invest accordingly, CNBC’s Jim Cramer said Wednesday.
“You have to take every opportunity to buy high-quality cyclics in weakness,” said the host of “Crazy Money.”
Cyclical actions are those whose trading patterns tend to be driven by the economic cycle and the state of the general economy.
Cramer pointed to the Union Pacific Railroad, whose stock initially declined after news broke on Sunday that its rival Kansas City Southern had been acquired by Canadian Pacific through a $ 25 billion deal. The shares have since recovered those losses and then some.
Cramer called the carrier “a one-stop shop for the grand reopening.”
“If you knew the score, you could buy with confidence [Union Pacific] “In a weakness, because this market loves reopening parts,” he said. “I bet he has a lot more room to roll.”
Cramer spent weeks breaking down the market rotation, explaining that investors are trading last year’s winners, especially in the technology segment, and in companies whose businesses do better when the economy is growing.
All major averages declined during the trading day on Wednesday, although stocks in the energy, industrial and financial parts of the market showed strength.