CNBC’s Jim Cramer warns against trying to ignore the Iran war, as rising oil prices could eventually overwhelm even the best stock ideas.
“No matter what we do, we can’t contain the war. We don’t want the war to come to the surface. We can’t avoid this problem,” Kramer said on “Mad Money” Wednesday night. “People are trying to ignore the effects of the war, or to wait until it’s over.”
That may be why the market did not fall further on Wednesday. of S&P500 It ended slightly lower in a session that featured a 5% rise in U.S. crude oil prices. That’s a big difference from Monday’s jump to $119 per barrel. But now west texas intermediate Oil levels above $88 per barrel are still up more than 50% year-to-date.
Investors appear to be counting on the release of global strategic oil reserves to cushion stock markets until the conflict ends. President Donald Trump said Wednesday night that he would tap the U.S. Strategic Petroleum Reserve to ease energy prices. Earlier, the International Energy Agency agreed to release 400 million barrels of oil to deal with global supply disruptions.
While these moves are positive, they are merely a band-aid.
“Unless there’s some reason to believe the war is over, there’s nothing to stop oil prices from eventually rising above $120,” Cramer said. “That would break down any ring fences. All bullish bets would be off.”
He added that a spike to these levels or higher could lead to a widespread sell-off across stocks. exxon and chevron They will also be discarded simply because they are part of the index. ”
Still, Cramer outlined several themes investors could consider if oil stabilizes and tensions ease around the Strait of Hormuz, the critical waterway through which much of the world’s oil supplies pass.
The first theme is data center infrastructure utilizing AI. Kramer pointed to the following strong results: oracle As a validation of trends. “The strength of this theme was best demonstrated when data center king Oracle reported an impressive set of numbers showing that its ramp-up is going better than anyone thought,” he said. Second, memory used in AI and computing systems continues to be in short supply. Mr. Kramer commented: hewlett packard enterprise The third theme Kramer cited is discount retailers, which benefit when consumers lower prices during periods of inflation. “What’s important is that families with financial hardship find themselves in situations like this.” Burlington, loss storeand TJX We work with HomeGoods, Marshalls and TJ Maxx departments,” he said.
Although geopolitical uncertainty remains, Cramer concluded that these themes are “the only ones I know of that you can buy after an oil price crash that destroys the stock market.”
