The weakness seen in banks and cyclical stocks on Monday will be short-lived and investors should buy them lower, UKTN’s Jim Cramer said.
“When you look at the stocks that were hit today, I don’t think they’re going to stay on the downside,” the host of “Mad Money” said, noting the names “rally against the trend”. at the foyer seen on Monday. session “will not have legs.”
Darden Restaurants and Norwegian Cruise Lines – names hit hard by Covid-related restrictions – fell 3.5% and 2.3% respectively. Bank stocks such as JPMorgan Chase and Citigroup each fell more than 1%. Meanwhile, shares of Clorox and Procter & Gamble – two companies that outperformed at the start of the pandemic – rose 2.6% and 1.6% respectively.
“The most important lesson today is that this market is volatile, so don’t lose sight … [these] stocks when they’re going down, ”Cramer said.
Cramer said he expects more upside in bank and cyclical stocks which fell during the session. He also recommended investors look into buying shares in Disney and Boeing, two companies associated with travel and reopening the economy.
Cramer added that investors can use days like this to reduce holdings in foreclosure games and turn into stocks that can benefit from an economic recovery.
“Sooner or later the rotation will change direction, which means the money will go back to the big reopening stocks – the banks and the cyclicals – so you want to use days like today, and maybe tomorrow,” he said. Cramer said, “to buy them into weakness. while you reduce your positions in foreclosure stocks.”
Disclosure: The Cramer Charitable Trust owns shares of Disney and Boeing.