CNBC’s Jim Cramer said Wednesday that investors are moving away from riskier parts of the market.
All three major indexes fell. of Dow Jones Industrial Average While it fell by 953 points (1.87%), S&P500 and Nasdaq Composite They fell by 1.62% and 1.98%, respectively. But behind the scenes, Kramer said more significant changes are occurring as investors shift into the traditionally defensive areas of the market.
“This is a market that has lost its appetite for risk,” the “Mad Money” host said.
To illustrate his point, Cramer turned to the list of S&P 500 stocks that hit 52-week highs on Wednesday.
He noted that the group is dominated by real estate investment trusts, insurance companies, consumer staples and other low-risk businesses. two shares in Cramer’s Charitable Trust; Linde and TJX companieswas also on the list.
“You know what this says to me?” he said. “This market is fleeing. It doesn’t want to take a lot of risk.”
Relatively few technology companies made the list. applied materials and KLA CorporationSemiconductor equipment makers, which have benefited from strong demand for memory chips, were among the exceptions.
Cramer said the composition of this list is very different from the market leadership that investors have been accustomed to over the past few years. He said investors are increasingly prioritizing stable cash flow, dividend income and businesses that can withstand a more uncertain economic environment, rather than chasing high-growth technology stocks.
“People talked,” Kramer said. “They want security and yield, and maybe they’re tired of data centers and fast-growing companies. Right now, growth is slow and there’s too much risk.”
