Stay-at-home stocks led US stock markets higher on Thursday after the sharp crash the previous day, according to markets veteran Jim Cramer.
Texas, which was among the first states to reopen, is seeing an increase in infections. Yesterday Texas Governor Greg Abbott announced that he is putting the state’s reopening plans on hold amid increasing hospitalizations that are putting a strain on the state’s health infrastructure.
“When the state of Texas was forced to pause its reopening plan because of record Covid infections … suddenly the stay-at-home stocks come back in style and it took up the whole market,” said Cramer on CNBC’s Mad Money.
He added: “Many of today’s winners were the usual suspects that benefit from the pandemic. The truth is we’ve been through this before and we know that lots of stocks benefit from the re-emergence of the stay-at-home economy.”
Tech stocks such as Amazon, Netflix, and Zoom Video Communications have soared this year as consumer preferences have changed due to stay at home orders.
Apart from the stay at home stocks, banks, and energy stocks also contributed to US stock markets’ rise yesterday. The US Federal Deposit Insurance Commission announced that it would ease the Volcker Rule, which are restrictions on banks imposed after the 2008 financial crash.
In another development that counterbalances the easing of the Volcker Rule, the US Federal Reserve imposed restrictions on US banks by suspending their buybacks and capping their dividends.
Cramer was not impressed by the banking sector’s outlook. He said: “Stay away from the banks.”
76.4% of retail investor accounts lose money when trading CFDs with this provider.
Total Number of Stocks & Shares+2000
Charge per Trade
FTSE 100Zero Commission
Users should remember that all trading carries risks and users should only invest in regulated firms. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Mohit Oberoi is a freelance finance writer based in India. he has completed his MBA with finance as majors and also holds a CFA charter. He has over 13 years of experience in financial markets. He has been writing extensively on global markets for the last six years and has written over 6,500 articles. He mainly covers metals, electric vehicles, asset managers, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.