Financial institution and cyclical shares are value shopping for
The weakness seen in banks and cyclical stocks on Monday will be short-lived and investors should buy them right now, CNBC’s Jim Cramer said.
“If you look at the stocks that hit today, I don’t think they’re going to stay down,” said the Mad Money host, noting the “counter-trend rally” on behalf of Monday’s stay-at-home session “won’t have legs.”
Darden restaurants and Norwegian Cruise Lines – names hit hard by Covid restrictions – fell 3.5% and 2.3%, respectively. Bank stocks like JPMorgan Chase and Citigroup each fell more than 1%. Shares in Clorox and Procter & Gamble – two companies that outperformed at the start of the pandemic – rose 2.6% and 1.6%, respectively.
“The main lesson today is that this market is volatile, so don’t throw it away … [these] Shares when they fall, “said Cramer.
Cramer said he expected the bank to move higher and cyclical stocks to pull back during the session. He also recommended investors buy shares in Disney and Boeing, two companies linked to travel and reopening the economy.
Cramer added that such days can be used by investors to reduce holdings in lockdown games and switch to stocks that can benefit from an economic recovery.
“Sooner or later the rotation is going to change direction, which means money is flowing back to the big reopening stocks – the banks and the cyclicals – so you want to use days like today and maybe tomorrow,” Cramer said, “to get them in the weakness to buy. ” while you trim your positions in the lockdown stocks. “
Disclosure: Cramer’s charitable foundation owns shares in Disney and Boeing.
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