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Inflation panic shook the market, criticism of buying growth stocks



CNBC’s Jim Cramer suggested that market participants have two ways to deal with fast-growing growth stocks that were teetering in turbulent trading on Wall Street on Tuesday.

Investors can choose to participate in the sell-off, which caused some technology companies such as Apple to fall into the negative trading zone this year.

Kramer said that another option is to take clues from the reiterated commitment of Federal Reserve Chairman Jerome Powell (Jerome Powell) to maintain interest rates at a low level, and then continue to consider and consider increasing the value of discounting from high points. stock.

The “Crazy Currency”

; host said: “After the rally later this afternoon, it is not too late if you are willing to sell more expensive stocks.” “But as for the better growth stocks, they fell more than 10%, just call me the buyer. Although it’s not all at once and it’s not too big, the buyer still has to retest the 9:47 low we saw today.”

Cramer’s assessment of current market conditions is a roller coaster trading day, with major average prices in the United States rebounding from intraday lows. The market suffered a sharp sell-off in the early trading, the Nasdaq Composite Index fell to a low of nearly 4%, and then the blue-chip Dow Jones and Standard & Poor’s 500 indexes fell slightly at the close.

The Dow rose more than 15 points to 31,537.35, an increase of 0.05%. The S&P 500 index rose 0.13% to close at 3,881.37 points, ending a five-day losing streak. Nasdaq (Nasdaq) rose sharply, the Nasdaq index failed to rise for a continuous trading day, fell 0.5% to 13,465.20 points, continuing Monday’s decline.

Cramer said: “I am very happy to accept the idea that you need to register here, but I happen to like growth stocks in inflationary panic. I like growth stocks when risks exist. I like growth stocks when risks disappear.” said.

“If you want to keep growth stocks… you have to be prepared to bear the pain, as in late 2015 and early 2016-that is the last good time to buy these stocks-or you can do some sell-offs, if you want to try and In exchange for a lower price,” he added.

As investors exchange growth and technology stocks from companies that have performed better than expected throughout the pandemic, the market has been exhausted, and the company’s business is expected to pay off as the economy reopens. The Nasdaq Index is 4.5% below its closing high at the beginning of the month.

Kramer said that fears that the recovery of inflation may trigger the Fed to raise interest rates, just as it raised interest rates twice in the three months from 2015 to 2016, shocked investors in growth stocks. High interest rates pose a challenge to growth and utility stocks.

Apple, Salesforce and ServiceNow’s stock prices have all fallen by at least 3% this week.

However, Powell told members of Congress at his Congressional appearance on Tuesday that inflation is still “soft”, the labor market is facing ongoing challenges, and the central bank is committed to its current monetary policy.

This relieved investors of interest rates and helped the market make up for some losses.

Kramer said: “This time, our Fed chairman vowed to postpone rate hikes-too many unemployed-but at some point and at some point, these growth stocks will be hopeless.” “They look like Today…before people come in.”

Correction: This story has been updated to reflect the correct number of points for the Dow Jones Index to rise.

Disclosure that Cramer’s charitable trust owns shares in Apple and Salesforce.

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