Mad Money host Jim Cramer looks at cyclical stocks and the reason they’ve become true winners, even though the economy seems to be headed into a Fed-mandated recession. Sign up and learn more about the CNBC Investing Club with Jim Cramer
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Somehow, cyclicals have become winners heading into a Fed-mandated recession, says Cramer
In a surprising turn of events, cyclicals – stocks whose performance is closely tied to the economic cycle – have emerged as winners during the current economic scenario, according to popular television personality and market commentator, Jim Cramer.
With the Federal Reserve signaling the possibility of entering a recession in the near future, most investors would typically expect defensive sectors like utilities, consumer staples, and healthcare to outperform. These sectors are known for weathering economic downturns better as they provide essential goods and services that people will always need, regardless of the state of the economy.
However, Cramer suggests that the current market environment is turning this logic on its head. Traditionally, cyclicals would be the first to suffer when an economic downturn hits. These sectors include industries such as manufacturing, construction, automotive, and materials, which typically experience sales declines during periods of economic contraction.
So why have cyclicals become winners amidst the uncertainty of a Fed-mandated recession?
Cramer speculates there may be several factors at play. Firstly, he believes the anticipation of massive government spending on infrastructure projects, clean energy initiatives, and job creation plans under the Biden administration has boosted the prospects of cyclicals in industries like construction and materials. Investors are looking ahead and betting on the potential economic boost that such projects could provide.
Secondly, the ease of monetary policy implemented by the Federal Reserve may be fueling the rise of cyclicals. With the central bank maintaining low interest rates, borrowing becomes cheaper, incentivizing consumers to spend on big-ticket items like cars and homes – benefiting sectors such as automotive and residential construction.
Lastly, the rapid distribution of COVID-19 vaccines and the easing of pandemic-related restrictions have contributed to an increased optimism around the potential rebound of the global economy. As economies reopen, cyclicals stand to benefit from a surge in consumer demand for goods and services that were put on hold during the pandemic.
While it is still early to determine whether this trend will continue in the long term, it is clear that cyclicals have defied expectations and are now finding themselves in a unique position heading into a possible recession. However, it is important for investors to exercise caution and perform thorough research before making any investment decisions, as market conditions remain uncertain and subject to quick changes.
In conclusion, the current market environment has presented an unexpected twist with cyclicals emerging as winners amidst the anticipation of a Fed-mandated recession. Factors such as government spending, accommodative monetary policy, and the easing of pandemic restrictions have all contributed to this unusual trend. As always, it is prudent for investors to stay vigilant, consider the risks and rewards, and adapt their strategies accordingly to navigate the uncertain market waters.
Added 5 new stocks to my shorting list, great findings Jimbo.
Does anybody really care about his opinion though?
https://m.youtube.com/watch?v=i2d7gPelw58
Bull make money, bear makes money, and fool that listens to Kramer left holding the empty bags.
What did he say? I just don’t understand his English
At some point, a bear market will end and a new bull market will begin. But how can you tell when the market bottom has been reached. How can I profit from the present market", I mean I've heard of people making upto $250k in couple months during this crash and I'd like to know how.
Any updates on xela?
Investors can’t predict the future, bearish periods automatically give way for a new set of stocks to buy and watch while setting the stage for a new profitable uptrend. I have come across articles of people that grossed profits up to $250k during this crash, what are the best stocks to put on a watch list or buy at the moment?
In terms or predictableness the only factor of intelligience for that is beyond the eye. Both ways can you know what will happen if they can produce more meaning then ‘predictable’ people. Or people follow that level of intelligience in a manner that applies so nothing personal just factors that include thought and perception. Now when personally is applied the biggest factor is personality then people so now we have a problem
It is unlikely in terms out out in in
So let me group of this network in major proportions
Out out is stand for mental outside thinking where perception is not apart except for though in only that person. And IN thinking is set to predictable not outside of the box and in in means the answer to a question so if two in in predictable answer with predictable set up.
So out out plus in in equals a predictable answer as in the answer you get in as an an predictable score.
Meaning let's say iq test if there intelligent it would make sense there less predictable at least if to make this answer for the question work. But there are also many factors and each factor will change the out come so that means OVERALL there would tend to be less predictable
When will this dude get they literally have an inverse etf named after him lol
SJIM GO SJIM TO THE MOON
For me he is my 'Do the opposite ' indicator…
"go to the website.." ya right
Just go leveraged long because I love you
He is just talking nonstop nonsense
thank you
The climate change scam was never about the climate, which runs on cycles and is human induced, was all about changing the world order from oil to the new green Marxism. This will all end horrifically.
A breather day… Next breather day is in 3 months when Jerome Powell speaks again. Along with every day in between. We all know the feds will continue to raise rates and taxes until the WEF wins and you will own nothing and be happy. Except on your deathbed when you realize you cannot hand down the wealth you created.
Inverse Cramer ftw!!!!!
So much background white noise, who the hell is running the audio board?
Just start tossing 100 basis points in the mix and get it over with. This market is living off hopes and dreams.
Hey Jim , you stand on a corner long enough a bus will come.
What happened to we are in a bull market lol. This idiot has no clue about the market
somehow this clown show is still airing
Fed wants us all in food lines selling children for Fenty!☠️
Jim doesn't know Jack !
How does nobody ever point out that this man isn't even coherent. I honest to god understand around 60% of the words he attempts to say. His job is to talk. Fire him for god sake.
The government has no firm plans to combat inflation. Stocks, Houses and commodities will rise along with everything else as they will continue to inflate. You can't just sit on your cash and wait for a crash; you have to put your money to work, start investing gently, and then pick up the pace as the prices fall further. Making the decision to take money out of my account in excess of $500K at this time is more difficult. I am aware of certain investors that continue to make that much despite the terrible downturn market. I wish I could pull that off.
Vanguard Federal Money Market Fund yield at 4.51%
25 or 50 bp next meeting?