- After a big sell-off in shares of big technology companies on Thursday, CNBC's Jim Cramer advised investors to take advantage of the rotation, but be careful it may not last long.
- “Have fun with the rotation. Historically, it has spread things out. Tomorrow there is another opportunity to cash in on today's winners,” he said. “But please, don't linger if rates stop falling, and stop falling fast.”
After buyers fled big tech companies on Thursday, CNBC's Jim Cramer advised investors to benefit from the rotation but be aware that it may not last long.
“Have fun with the rotation. Historically, it has spread things out. Tomorrow there is another opportunity to cash in on today's winners,” he said. “But please, don't linger if rates stop falling, and stop falling fast.”
Investors dumped shares from some of this year's best-performing companies, including Nvidia Corp. and Meta Inc., after a weak consumer price index spurred Wall Street hopes that the Federal Reserve will cut interest rates. Home and industrial stocks such as Home Depot Inc. and Caterpillar Inc. rose, as they are seen as beneficiaries of lower interest rates.
Cramer said such rotations “tend to last about three days in nature.” Bond yields would need to continue to fall for these stocks to keep rallying, he said. “I'm not convinced we're going to see enough data coming out to continue to spur the bond market rally.” He also noted that no fundamental changes have occurred at many of Thursday's winners.
He said buyers of big tech companies will likely return soon, but warned investors not to buy these giants right now because a recovery will take time.
“It will take time to recover from such a blow and stocks will likely fall in the meantime,” he said. “So if you want to buy, wait a few more days and see how they react when the banks report good numbers tomorrow.”
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