Jim Cramer says investors need to protect themselves in a market where the Fed is no longer their friend.
It’s getting pretty nutty out there, Jim Cramer admitted to his Mad Money viewers Wednesday, following yet another midday market reversal that included a wild, 900-point swing from peak to trough.
When the Federal Reserve tightens, it’s always bearish for stocks, Cramer said, but that just means there are fewer opportunities out there. You just have to know where to look.
For all those bears out there, Cramer reassured viewers that Fed chair Jay Powell is a smart guy, and has no intention of wrecking the economy just to tamp down inflation. If you’re investing in real companies with real earnings, you’ll do just fine as interest rates rise, just as you always have.
But, Cramer reiterated, if you’re invested in IPOs, SPACs or companies with no earnings to speak up, you must use any strength to sell as soon as possible. The Fed is not your friend if you own SPACs.
As for the rest of us, Cramer’s earnings scorecard looked terrific, with 13 upside surprises compared to just four downside surprises. He said companies likes Johnson & Johnson (JNJ) – Get Johnson & Johnson Report, American Express (AXP) – Get American Express Company Report, IBM (IBM) – Get International Business Machines Corporation Report, Microsoft (MSFT) – Get Microsoft Corporation Report, Verizon (VZ) – Get Verizon Communications Inc. Report, 3M (MMM) – Get 3M Company Report and Wells Fargo (WFC) – Get Wells Fargo & Company Report are great to own. He would avoid Boeing (BA) – Get Boeing Company Report, General Electric (GE) – Get General Electric Company Report, Netflix (NFLX) – Get Netflix, Inc. Report and JPMorgan Chase (JPM) – Get JPMorgan Chase & Co. Report, at least for the short-term.
Sell the junk and buy real earnings, Cramer concluded. That’s the way to protect yourself in a market where the Fed is no longer your friend.
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