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CNBC’s Jim Cramer said Monday he believes investors can start looking for battered stocks to buy after a tough time for Wall Street. But he stressed the need for discipline.
“At the moment there is still a lot of risk, although with the Nasdaq battered and the overall market down 5% from highs, I’m not trying to tell you, ‘Oh, here’s the sell’, the “Mad Money,” the host said after the three major US stock indexes finished in the red. “We can start looking for buying opportunities on the way down.”
“But we have to buy stocks gradually as it goes down,” Cramer added, “because if you just participate in every downside, well, you’re going to get slaughtered.”
The S&P 500 fell 1.3% on Monday to end at 4,300.46, its lowest close since July, while the tech-rich Nasdaq Composite fell 2.1% and is now down 4.7% in its last five sessions. The Dow Jones Industrial Average index lost 323.54 points on Monday, or 0.94%.
Although some stocks are reaching attractive levels, Cramer said, he warned that a “tough” market remains. Investors are no longer conditioned to just buy every drop after Wall Street’s strong rally from March 2020 lows, and the high price of oil is creating inflationary concerns, he said.
There have also been “huge” profit-taking in tech stocks, which weigh on the market as a whole, Cramer said, and lingering uncertainty about Washington’s policy and Beijing’s aggression.
“Against all of that, there’s Merck’s Covid pill.… It’s a good start,” Cramer said, referring to the company’s oral antiviral therapy, developed with Ridgeback Biotherapeutics. Drugmakers say it cuts the risk of hospitalization or death by about half for patients with mild or moderate Covid cases.
“Getting Covid under control is incredibly important, even for inflation. I think if stocks go down we could be due to an oversold rebound,” Cramer said. “Nothing like lower stock prices to make the market more attractive. Plus, if oil prices ever drop, averages will explode higher.”
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