Shares are trading at reopening optimism, but risks remain

The stock market reopened optimism, causing the fall in technology stocks and the rise in cyclical stocks in Tuesday’s session, CNBC’s Jim Cramer said.

While the main averages narrowed at closing, Cramer said the stock was defined by a decline in consistent traders and an increase in sporadic stocks of growth and expansion.

“People are optimistic, people. Investors vote with their feet,” the Mad Money host said. “They leave these stories of secular growth, the actions of companies that work well, regardless of whether the economy is hot or cold. Instead, they find their way to shares of companies that only make money when the business is in boom. “

The comments come after the general market withdrew from gains on Monday, which followed after a tough sell-off last week. The Dow Jones Industrial Average fell 144 points to 31,391.52 on Tuesday, down 0.46%. The S&P 500 fell 0.81% to 3,870.29. The high-tech Nasdaq Composite fell 1.7% to 13,358.79.

S&P sector indices also traded lower during the session, with the exception of materials. Discretionary parts of the technology market and consumers had the hardest samples, both indices joined the Nasdaq and fell more than 1%.

Cramer said market activity reflects investors betting on the odds that citizens will soon be able to leave Covid-19 protective masks and that states will soon be able to lift coronavirus restrictions and return the economy to normal. thanks to the country’s progress in vaccines. Still, there is a tug-of-war between optimists and the prudent, he added.

On Tuesday, the governors of Texas and Mississippi on Tuesday announced plans to remove mandates wearing masks and all restrictions on business activity in their states.

“They’re betting that we’ll soon be able to rip off our masks and get back to normal, and that’s the core of this market right now,” Cramer said. “For now, the people who believe our long national nightmares are over. They are the ones who win.”

He warned, however, that the market momentum remains vulnerable to risks. Cramer said the country could reopen too quickly and that variants of the virus, such as the strain first discovered in South Africa, could cause another rise if the country lowers its guard.

While President Joe Biden hopes to sign a $ 1.9 trillion stimulus spending package that is making its way into Congress later this month, any hiccup in pushing the bill into the Senate could have an impact on the market.

“There are still a lot of things that can go wrong,” Cramer said.