Jim Cramer says it’s time to forget FAANG, forget tech and forget biotech — until these sectors become cheaper than the rest of the market.
The great pivot on Wall Street continues, and it’s being funded by money managers selling all of your favorite tech stocks. Those were Jim Cramer’s cautionary words to his Mad Money viewers Monday. The tech stocks still have growth, but this is a market that only wants value.
It’s time to retire FAANG, Cramer’s acronym for Meta (FB) – Get Meta Platforms Inc. Class A Report, Amazon (AMZN) – Get Amazon.com, Inc. Report, Apple (AAPL) – Get Apple Inc. Report, Netflix (NFLX) – Get Netflix, Inc. Report and Alphabet (GOOGL) – Get Alphabet Inc. Class A Report. Put simply, FAANG doesn’t thrive in the works with high inflation and rising interest rates, and that’s what we’re likely to have for the foreseeable future.
While it’s true that some commodities are already peaking, the fact is that Russia’s invasion of Ukraine is likely to keep food and energy prices elevated. China’s lockdowns against Covid are adding to supply chain issues, and there’s no relief in sight for labor or freight prices anytime soon.
Cramer told viewers they need to use any market bounce to cut back their exposure to tech and focus instead on money center banks, oils, retailers with scale, health insurers and big pharma. It’s time to forget FAANG, forget tech and forget biotech until these sectors become cheaper than the rest of the market.
“I hate this pivot,” Cramer concluded, but with money managers repositioning, we have no choice but to pivot along with them.
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