CNBC’s Jim Cramer said Monday that even historically winning stocks are being crushed as fears over the Iran war begin to drive consumers away.
“If consumers are really weak because of $4 and change gas, they should be buying stocks in TJX, Dollar General, Dollar Tree, Ross Stores and Five Below,” the “Mad Money” host said.
But that hasn’t happened.
Investors are increasingly selling consumer stocks on concerns that soaring oil prices will weigh on household spending, amid concerns that the Iran war could drag on after President Donald Trump’s rejection of Tehran’s latest offer to end the conflict. of SPDR S&P Retail ETF Shares fell about 3.6% on Monday, without help from discount retailers and off-price chains. These chains tend to outperform during tough economic times when consumers cut prices.
Kramer pointed out that TJX — the parent company of TJ Maxx and Marshalls — is typically cited as one of the retailers that is “better in this environment” because it can profit when other chains are stuck with excess inventory. Kramer added that his charitable trust, a portfolio used by the CNBC Investment Club, owns the stock and is discussing buying more in light of the recent decline in the stock price. TJX lost about 3% on the session.
Other companies that have held out in the weak consumer environment are also struggling. Five BelowThe company, which sells completely discretionary products, has been “ruined,” Kramer said. The stock price fell about 6.7%.
Despite achieving good results, loss It became one of the worst performing companies in the market. “Ross was the best performer in the group, but he was one of the worst performers overall.” S&P500Ross fell by about 5%.
To Kramer, this disconnect suggests that investors are reacting emotionally to headlines about war and oil, rather than following the typical playbook against weakened consumers.
“It is now clear that this war will continue for a long time,” he said. “Certainly, Wall Street now thinks so.”
Ultimately, Cramer cautioned against trading based on headlines, arguing that investors betting on weak consumers may need to reconsider where they bet.
“Are you buying retail because the wrong stocks are cheap?” he said. “That didn’t work.”
