According to CNBC’s Jim Cramer, stock market stocks that benefit from the coronavirus pandemic have boosted the stock market as investors continued to struggle with dozens of cases.
“When Texas was forced to suspend its reopening plan due to record Covid infections … all of a sudden, stocks in the house stayed in fashion, and it took the whole market,” said Mad Money presenter. “Many of today’s winners were ordinary suspects who benefit from a pandemic.”
Major averages all advanced more than 1% during the session during the buyback period of major sales the day before.
While Covid-19 cases have skyrocketed in the American South and West, Texas Governor Greg Abbott announced Thursday that he has paused plans to resume state operations as officials struggle with growing hospitalizations. Renewed fears about the spread of the virus led to a drop in the market at the opening, but the S & P 500 reversed course, ending the day, rising 1.10% to 3,083.76.
“The truth is, we’ve been through this before, and we know that many stocks benefit from a stay-home economy,” Kramer said. “There are 100 companies in the Cramer Covid-19 index … In total, stocks now cost $ 12.2 trillion. That’s more than the steep $ 11 trillion when we put together this list back in April. The entire S&P 500 costs only $ 25.2. trillion. “
Oil stocks also contributed to the positive trading day as the oil price rebounded. Bank shares also rose, although the move seems ephemeral, Kramer said.
Bank stocks jumped on the news that the Federal Deposit Insurance Commission would ease the guidelines set out in Volcker’s rule, which is fueled by the Great Recession, which governs how financial institutions invest in venture capital and other funds. However, later this was opposed by new restrictions by the Federal Reserve System, requiring large banks to suspend their share buyback programs and limit dividend payments for the third quarter, trying to prevent capital from falling in many banks to relatively low levels due to the effects of the pandemic.
“Stay away from banks,” Kramer said.
The Cramer Covid-19 Index, filled with stocks that benefited from the block, outpaced the three major averages on Thursday, adding 1.5%.
According to Cramer, investors are investing more and more money in pandemic stocks, and stocks like McCormick, Clorox, Etsy and Shopify have been able to pull together. Pantry, e-commerce, work at home, and technology stocks in megacities were some of the largest beneficiaries of the response to coronavirus.
According to the host, as the economy is still in peril, Wall Street has been able to move forward thanks to federal action.
“Under normal conditions, when we just let the economy happen, the stock market would collapse today,” Kramer said. “But the Federal Reserve is determined to keep bankruptcy as low as possible.”
Disclosure: Cramer’s charity holds McCormick shares.