After witnessing a brutal Wall Street sell-off on Wednesday, CNBC’s Jim Cramer is still recommending investors to narrow their positions and wait for more attractive prices before putting more money on the market.
“Awaken America’s trade has worsened,” he said.
As coronavirus infections re-emerge in some parts of the country, reopening trade, or post-pandemic stocks, is receding, and the moves to stay home are also in a precarious position with the market registering strong concentrations in the month. .
All of the leading averages plummeted more than 2% in Wednesday’s session.
“I want you to raise some cash so you can put it to work buying stocks at lower levels,” said the host of “Mad Money.”
“Right now, the task of some of these stocks madly bought by retail investors shows suboptimal fundamentals, if there is any fundamentals,” he continued. “As for the tax collector: the only time you don’t need to pay taxes is when you don’t have a profit. Payment of capital gains [tax is a] high quality problem, especially with low rates. “
The Dow Jones fell more than 710 points, or 2.72%, to 25,445.94 for its largest percentage change in nearly two weeks. The S&P 500 returned 2.59% of the value to close at 3,050.33 and the Nasdaq Composite, which has set 10 closing records this month, fell 2.19% to 9,909.17.
The market was digesting the increase in Covid-19 cases in dozens of states, including Florida, California, and Texas, and was weighing Joe Biden’s best odds of winning the White House this fall.
“The Nasdaq has just had its biggest rebound since the fourth quarter of 1999, the last full quarter before the dot-com bubble burst,” said Cramer. Whereas “the prices we saw in ’99 were absurd given the lack of profit, or even sales, in some of these companies. Today, the technology, which is the leader, is very different.”
The biggest names in tech, making big profits, are set to “straighten up” after recovering in recent days, Cramer said. Those stocks include Alphabet, Amazon, Apple, Facebook, and Microsoft, whose annual earnings range from 7% to 48%.
Cramer also said that Zoom Video, Okta, RingCentral, Twilio, Etsy and Wix.com, all with gains in the range of 58% and 276% this year, could see some downsides in the near term.
“Upon entering this session, these actions had 8 days followed by concentrations. That is not natural,” said the host. “When you get that kind of movement, it always attracts sellers, and that’s because people start to think they are parabolic.”
Disclosure: Cramer’s charitable trust owns shares of Amazon, Apple, Alphabet, Facebook and Microsoft.
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