CNBC’s Jim Cramer analyzed Wednesday’s market rally and identified a variety of factors driving the rally, including optimism about a Federal Reserve rate cut and solid earnings in several sectors.
He also suggested investors look beyond the volatile technology sector and look at sectors such as retail and banking.
“For the first time, we have a true macro rally. Let’s stop obsessing over what we don’t know about technology,” Kramer said. “And instead of trading Apple and Nvidia, just own them and get a real economy stock for the long haul that could be ready to compete for a rose in the world championship until the end of the year, unless something weird comes out of the White House.”
The index rose on Monday, Dow Jones Industrial Average While it increased by 0.86%, S&P500 Add 0.30%, Nasdaq Composite Investors celebrated ADP’s strong employment report, ending the day up 0.17%. Cramer suggested that the weak jobs report could actually pave the way for the market to remain strong through the end of the year, as it would make it easier for the Fed to cut interest rates.
Cramer said one of the key factors in Monday’s rally was banks, saying the sector was the most important group in the market. He went on to say that the big banks were in a frenzy after the results, naming the following banks: wells fargo, citygroup, bank of america and JP MorganThe same goes for credit card companies. capital one and american express.
he pointed out that dollar general reported a strong quarter despite food stamp cuts. Macy’s also reported a surprisingly strong quarter, he continued, noting that the retail giant is starting to realize the benefits of closing weaker stores. Other retailers have also reported better-than-expected results, Kramer added. american eagle, tapestry, ralph lauren, kohls, TJX, urban outfitters and walmart.
“In my 40 years of following the retail industry, I can’t remember a time when so many chain stores were doing so well during the holiday season that they had so many full-priced items,” Kramer said. “The products just aren’t selling. There’s no promotion.”
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