Failure to go the Covid incentive has “doomed so many firms to failure”.
CNBC’s Jim Cramer on Wednesday angered Congress and President Donald Trump’s administration for their inability to reach an agreement on additional coronavirus relief this fall. He claimed the lack of financial support had caused permanent damage to small and medium-sized businesses in the US
“I really hate to say that, but I think that Congress has doomed so many companies to fail. The President has doomed so many companies to fail,” said Cramer in the “mid-term report”.
The result is a retail landscape that, according to Cramer, has shifted even further in favor of the big public companies like Walmart, Target, Home Depot and Amazon. For investors, this means that the sales surge these major retailers saw during the pandemic may be more sustainable than some believe.
“I think a lot of these companies … just added a huge amount of loyalty. I think these companies wiped out a lot of smaller companies because there is no incentive,” said the Mad Money host. These businesses, he added, “have no lines of credit. They can’t keep up. They are the empty shop windows of the country.”
Cramer, who made the decision in October to temporarily close his small restaurants during the pandemic, said closing independent businesses was a “terrible thing”. However, he said, “It has nothing to do with the stock market.”
Cramer’s comments came Wednesday shortly after Jamie Dimon, CEO of JPMorgan Chase, sharply criticized coronavirus relief in Washington. Legislators have been bogged down for months after many of the critical tenets of earlier stimulus laws expired in late July. At the center of the inaction was disagreement over the size and scope of the bill, with Republicans generally favoring a smaller package than Democrats.
“I know now that we have this big debate. Is it $ 2.2 trillion, $ 1.5 trillion?” Dimon said at the New York Times DealBook conference. “You must be kidding me. I mean, just split the baby and go on. I mean, that’s childish behavior from our politicians. We have to help the people of America.”
For his part, Cramer has been warning of the unequal consequences of an ongoing pandemic with no further help for small businesses for weeks. In late September, he said the strength of the Olden Garden-parent Darden restaurants’ holdings should “scare” people.
“Darden wins because its private competitors cannot cope with the Covid-19 economy,” Cramer said on September 24th. “We’re headed into a world where if you want to go out for dinner you won’t have one.” many options other than some large chains with deep pockets. Olive Garden will be the height of fine dining. ”
At that point, Darden stocks had risen about 270% from their coronavirus-era low in late March. The US outbreak has only intensified since Cramer’s statements, and governments across the country are weighing further restrictions on businesses like restaurants and bars. Darden’s shares are up 13% since September 24th.
Disclosure: Cramer’s charitable foundation owns shares in Amazon and Walmart.