CNBC’s Jim Cramer said Monday that rising oil prices are driving a familiar rotation in the stock market, weighing on it at the start of a new trading week.
“Get ready for a Pavlovian trade,” the “Mad Money” host said, referring to classic conditioning behavior. “They always do that, so it will work for the time being.”
Oil prices soared on Monday after President Donald Trump announced he would reinstate the blockade of Iran in the Strait of Hormuz. west texas intermediate crude oil While it rose 9.4% to settle above $78 per barrel. brent international crude oil It rose 9.6% to just over $83. Cramer said Wall Street’s reaction was predictable, with investors rushing to companies that typically benefit from higher gas prices while dumping stocks more vulnerable to rising fuel costs.
Cramer said refiners are likely to be winners because they can quickly pass on higher fuel costs to consumers. Mr. Kramer raised a blank arrow. valero energy He named it his top choice, saying it was the most “pure” way to benefit from tight refining capabilities. Valero stock rose about 5% on Monday.
major chemical company Dow Corporation It was another outstanding work for Kramer. He said the company should benefit if production in the Persian Gulf is disrupted by foreign competitors. “The Dow is using domestic energy and it’s much cheaper. It’s a total win,” he said. Dow shares rose more than 4%.
Kramer also highlighted fertilizer producers. mosaicargue that rising energy costs will immediately improve competitiveness. “Gulf companies produce a lot of fertilizer. It’s a commodity product. If Iran closes the Gulf, Mosaic immediately becomes a low-cost producer.” Mosaic shares rose nearly 4% on the session.
Discount and off-price retailers may also benefit during periods of high oil prices, arguing that consumers typically cut prices when gas prices rise. A 100-yen store fits that theme perfectly, Kramer said. walmart and CNBC investment club name TJX companies It’s a better investment.
Walmart rose nearly 1% on Monday, while TJX fell about 0.5%. Although these moves were not as pronounced, they definitely showed relatively better performance. S&P500 Close to 0.8% are closed. Nasdaq The stock fell about 1.5% on the day.
“Walmart didn’t have the best quarter, but they’re lowering prices to get people back into stores quickly,” Kramer said. He called TJX a “real bargain” and said off-price retailers are well-positioned to benefit as traditional retailers unload excess inventory.
