Cramer reluctant to buy market bounce, says ‘silly sellers’ could hit stocks again soon
CNBC’s Jim Cramer said he doesn’t feel comfortable buying into Monday’s early stock market bounce, following Friday’s omicron-driven plunge, because the selling could resume in the event of future negative news about the highly mutated Covid variant.
The Dow Jones Industrial Average — which had been up nearly 400 points, or more than 1%, shortly after Wall Street’s open — gave up some of those gains. However, the S&P 500 and the Nasdaq were hanging on to most of their early session gains, advancing roughly 1% and nearly 1.5%, respectively. All three stock benchmarks sank more than 2% on Friday and finished lower last week.
Cramer said on “Squawk on the Street,” before Monday’s open, that he’s betting on science, including future reformulated Covid vaccines and promising new oral treatments, to mitigate the effects of omicron.
“I’m coming back as being sanguine. Not today. Because you get the market up and the same people buying today, if they see someone who landed” in the U.S. and has the omicron variant, “They’ll say, ‘I got to sell,'” the “Mad Money” host said. “We have to guard ourselves against silly sellers.”
No omicron cases have been found in the U.S. yet. But infections have been found in South Africa, where the variant was originally identified, as well as the U.K., Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong.
Moderna CEO Stephane Bancel told CNBC he believes omicron is present in most nations. “I believe most countries that have direct flights from South Africa in the last seven to 10 days already have cases in their country that they may not be aware of.”
Bancel and Pfizer CEO Albert Bourla said in separate “Squawk Box” interviews Monday that their companies are working on omicron versions of their vaccines with the hope of getting them out next year.
Bourla said he expects Pfizer’s Covid treatment pill to be effective against the omicron variant. He added the company now expects to manufacture 80 million courses of the pill, an increase from its original manufacturing goal of 50 million courses.
Merck is also working on a Covid pill.
“You listen to Bourla and Bancel … and you come back and say, ‘Look, these guys are the people you have to bank on.’ They know the science,” Cramer said. “What that may mean is that these people solve it” and then if investors sold, “you have to buy back much higher.”