Momentum stocks like Tesla, Zoom and SPAC are stagnating

The same high-flying stocks that attracted investors to the stock market last year have left newcomers out of the cold, CNBC’s Jim Cramer said Monday.

“The pleasure house has walls formed by traditional actions that are kept under control, but the pain house has been falling apart,” the host of “Mad Money” said.

Cyclical stocks that are leveraged for a broader economy have caught fire and led the stock market to new highs, Cramer said. He noted stocks such as Emerson Electric, Ingersoll Rand, Honeywell, PPG, Home Depot, Lowe’s, JP Morgan Chase and Wells Fargo.

Each of these stocks, except Honeywell, has outperformed the market so far. Wells Fargo, with a 45% increase, has been the strongest performer in the group.

“Then you have the second market, which is dominated by the youngest cohort that has been captured by trade without commissions, an easy-to-use Robinhood app and some very exciting actions that turned people into fortune last year,” said Cramer. .

Shares of Tesla and Zoom have struggled to keep up momentum after posting attractive numbers in 2020. Zoom has dropped more than 8% this year and 45% from its October high. Shares of Tesla have risen just 1% since the beginning of the year. Shares were last traded at $ 714.63, down 21% from the end of January.

Cramer also said many SPAC works are included in the “House of Pain.” Some of these are QuantumScape, Nikola and Lordstown Motors, which have seen shares fall by between 32% and 63% this year.

Disclosure: Cramer’s charitable trust has shares in Honeywell.

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