Cramer in buying growth shares after the scare of inflation shakes the market

CNBC’s Jim Cramer advised that market players have two ways to approach high-flying growth stocks that faltered and faltered a volatile session on Wall Street Tuesday.

Investors may choose to join the sale that has brought down some tech names like Apple into negative territory this year.

The other option: to signal the repeated commitment of Federal Reserve Chairman Jerome Powell to leave interest rates low, is to stay on the trip and consider charging decent shares at discounted rates. its highs, Cramer said after the market closed mixed.

“After this afternoon’s rebound, it’s not too late to sell the most terribly expensive stocks if you will,” the host of “Mad Money” said. “But when it comes to stocks with better growth, which are down more than 10% from their highs, they call me a buyer. Not all at once, it’s not big, but still a buyer in any other test of ‘those 9:47 hours we saw today. “

Cramer’s assessment of the current state of the market comes after a day of roller coaster trading where major U.S. averages bounced from their session lows. The market suffered a sharp sell-off in the morning, with the Nasdaq Composite falling nearly 4% within its reach, before the benchmark Dow Jones and S&P 500 managed to make modest gains at the close.

The Dow advanced more than 15 points to 31,537.35, a gain of 0.05%. The S&P 500 finished 0.13% higher with 3,881.37 to end the five-game losing streak. The Nasdaq, which has been very technological, was unable to meet enough for a positive day, falling 0.5% to 13,465.20, extending Monday’s losses.

“I’m happy to entertain the idea that you have to call the record here, but I like growth stocks on a reflation scare. I like growth stocks when risk is activated. I like stocks. of growth when risk is off, ”says Cramer. dit.

“If you want to keep the growth stocks … you have to be prepared to take pains, just like in late 2015 and early 2016 (this was the last big time to buy those stocks) or you can just sell want and try to switch back to a lower level, “he added.

The market has struggled through a rotation as investors shift growth and technology stocks that outperformed the entire pandemic by the value plays of companies expected to return the business to as the economy reopens. The Nasdaq now has a 4.5% discount on its maximum closed earlier this month.

Concern that a revival of inflation could cause the Fed to raise interest rates, as it did twice in a three-month period between 2015 and 2016, shook investors from growth stocks in recent days. , Cramer said. Higher rates pose a challenge to growth and utility actions.

Shares of Apple, Salesforce and ServiceNow have dropped at least 3% this week.

However, during an appearance before Congress on Tuesday, Powell told lawmakers that inflation remains “soft,” the labor market faces ongoing challenges, and that the central bank was committed to its current monetary policy.

This reassured investors about interest rates, which helped the market recover some losses.

“This time our Fed chief has promised to put up with the (too stopped) rate hike, but there will come a time and a time when these growth actions will be a little desperate,” Cramer said. “They’ll look like today … before people came in to buy.”

Correction: This story has been updated to reflect the correct number of points advanced by Dow.

Disclosure Cramer’s solidarity trust has shares in Apple and Salesforce.

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