Suddenly, coronavirus losers have the best stocks

Strong stocks are falling freely and outdated names are rising as market players adjust their portfolios to take advantage of a potentially strong economic recovery, CNBC’s Jim Cramer said Wednesday.

“That’s thanks to J&J (Johnson & Johnson), Modern and Pfizer,” the host of “Mad Money” said. “We are at the peak of a post-Covid boom that now seems to be pushing forward long ahead of schedule.”

Cramer added that money managers “now want open reopening works, which are in terrible shape, but could be big winners as the world returns to normal.”

With the U.S. economy expected to free itself from the severe downturn it suffered last year, the stocks of companies in the cyclical industries are living their day largely at the expense of strong growth and technological actions that increased during the pandemic. Cramer said investors invest money in airlines, cruise lines, hotels and non-essential retailers and divert funds from pandemic winners.

The split between technological and cyclical names, or companies that perform better in times of economic expansion, was illustrated in Wednesday’s market.

Shares of Norwegian Cruise Line and American Airlines gained 6.3% and 3.4%, respectively, while Wynn Resorts advanced 1.7% in the session. Peloton and Zoom Video Communications, two of the biggest blockchain winners, lost more than 8% each. Amazon also lost 1.9% and Walmart fell 2.9%.

“Everything he liked last year is now despised,” Cramer said. “These tables have become. Essential retailers have lost the mojo … Specialty players have roared again.”

At the broader market level, the Nasdaq Composite, which has been highly technological, received the biggest blow. The index fell 2.7% on Wednesday, closing nearly 8% below the record close reached last month. The 30-share Dow Jones Industrial Average fell 121 points, 0.4%, to close at 31,270.09. The S&P 500 fell 1.3% to 3,819.72.

Cramer called it textbook rotation and said it has a limited lifespan. Money managers will continue to rotate the money of the biggest winners in their portfolios to take advantage of lower prices elsewhere. The rotation won’t end until the economy reaches its expansion limit, when ten-year Treasury yields stop rising and the Federal Reserve raises levels to nearly zero, he said.

For the agile investor who wanted to fish the stock in growth stock, Cramer recommended switching it to stock for aircraft, trains, automobiles and industrial, supporting Chevron and Pioneer Natural Resources as the only two oil stocks worth the worth playing.

For the less agile investor, he advised earning profits on the big winners and waiting to find new entry points at lower prices.

“Once we get a cathartic collapse of epic proportions … then you can switch from boom and bust stocks to consistent producers,” Cramer said. “In the meantime, we have an excess of technological values ​​and a shortage of cyclical ones. Right now, you have to go with the lack.”

Disclosure: Cramer’s charitable trust has shares in Amazon and Walmart.