“I simply do not buy the negativity” in markets – Cramer praises Covid stimulus as a bridge to the vaccine
CNBC’s Jim Cramer said Tuesday that he believes investors should be optimistic about the recovery in the U.S. economy in the months leading up to a widespread Covid-19 vaccine.
“I’m just not buying the negativity here,” Cramer said on Squawk Box, pointing to the potential benefits of the $ 900 billion coronavirus stimulus package approved by Congress late Monday.
The auxiliary bill, which came after months of stagnation on Capitol Hill, includes a direct payment of $ 600 for many Americans, an unemployment benefit of $ 300 per week, and additional funding for small business loans. Money is also being given to distribute Covid-19 vaccines, as well as testing and contact tracing. President Donald Trump has yet to sign it.
“I actually thought the $ 900 billion package was very well thought out. I know it counts as slapdash. I don’t think so,” said Cramer, describing it as “the $ 900 billion bridge” to one Vaccine. “I’m a pessimist only in the sense that so many things went wrong before we got the bill. I’m an optimist for the future,” added the Mad Money host.
Healthcare workers and residents of long-term care facilities will receive priority on the first batch of available vaccine doses. So far, the Food and Drug Administration has approved recordings from Moderna and from Pfizer and its German partner BioNTech in the event of an emergency.
Johnson & Johnson, which has fully completed its Phase 3 clinical trial, has announced that it will file for limited regulatory approval in February if its vaccine proves safe and effective.
The supply of Covid-19 vaccines available is expected to increase in the coming months, leaving a wider pool of Americans eligible to receive the vaccines. Cramer believes that J & J’s vaccine could be instrumental in increasing vaccine availability over the next year.
Cramer’s comments came when the Dow Jones Industrial Average futures were largely flat. In morning trading, the Dow fell 150 points, or 0.5%, while the S&P 500 was also slightly negative. The tech-heavy Nasdaq was a little lower.
Stocks had a volatile session on Monday as Wall Street became concerned about a new strain of coronavirus floating around in the UK. However, some public health experts believe the existing Covid-19 vaccines will continue to offer immunity to the emerging virus variant.
In addition to the economic benefits, Cramer said, stocks are likely to continue to receive support from investors who start adding cash to the market. “There’s a lot of new money coming in,” he said.