CNBC’s Jim Cramer said Tuesday he believes it’s a favorable environment for investors to put money to work in the U.S. stock market.
Positive economic signs abound, Cramer said on “Squawk on the Street,” reading a sampling of headlines on Tuesday’s front page of The Wall Street Journal about a recovery in airline travel, cash reserves at banks and the encouraging factors fueling the hot housing market.
“I mean, the money is coming here,” Cramer said. “When I hear that, I know that people will say, ‘Wait a second. That is a bad sign.’ Or they want to take the other side of the trade.”
“I listened to these upgrades of the cruise lines and how they’re able to raise rates,” Cramer added. “I come back and say, you know what? It’s a good time to invest.”
Cramer’s comments came ahead of Tuesday’s strong open for the Nasdaq, which was solidly in the green early in the session. The Dow Jones Industrial Average and the S&P 500, which both closed at record highs again Monday, were fairly steady Tuesday morning.
The 10-year Treasury yield, which hit a more than one-year high Friday of 1.642%, was trading under 1.6% early Tuesday, giving some relief to growth stocks, which have been pressured by rising interest rates. Higher rates erode the value of future profits and compress market valuations. Bond yields have risen rapidly this year on concern about all the Covid stimulus overheating the economic recovery and causing inflation.
In recent weeks, Cramer has advised investors to stay away from high-multiple technology companies as a result of the rising rates. It’s a view he reiterated Monday on CNBC, saying it was “the wrong place to be.”
Instead, the “Mad Money” host has favored companies that would benefit from the reopening of the economy, such as those in the industrial sector, as well as names like Square that stand to gain from Americans receiving another round of coronavirus stimulus checks and putting money in savings and investing accounts.
“It’s not that I’m so bullish. It’s that people are going somewhere and doing things, and a lot of it has to do with things that have not been done in the last year,” Cramer said Tuesday, giving him reason to believe a stock like United Airlines can still run higher.