Jim Cramer dismisses recession fears and names sectors poised to soar after Fed meeting

CNBC’s Jim Cramer stated the Federal Reserve’s resolution to hold rates steady is a win for the bulls and is an indication the tightening cycle is coming to an finish. With inflation easing and the potential for rate cuts subsequent 12 months, Cramer stated the financial system has managed a gentle touchdown and extra sectors are prepared to soar.

“Sure, the straightforward cash has been made in a few sectors — largely tech — however now it is time for a bunch of different sectors to shine, the economically delicate ones that have been supposed to be crushed by an inevitable recession,” Cramer stated. “These shares aren’t preferred. May I recommend you cotton to them as a result of the aircraft has landed, our seatbelts are unbuckled, we’re taking place the gangway, calling an Uber and getting the heck out of the airport.”

The Fed held its key rate of interest regular for the third straight time, and committee members indicated there might be at the very least three price cuts in 2024.

Some on Wall Street fear this Fed motion suggests there is a recession on the horizon, however Cramer stated it might be clever to ignore this outlook, including {that a} strong labor report on Friday signifies the opposite. To Cramer, potential price cuts would imply “clean crusing” for shares, with buyers changing into much less occupied with bonds.

Although the market has been up for weeks, Cramer stated there’s nonetheless cash to be made in cyclical shares and sectors that profit from decrease rates of interest comparable to homebuilders, autos and financials. Cramer advised shopping for financials which have hit lows just lately, together with Bank of America, JPMorgan Chase and even regional banks that suffered after the banking disaster in March. He additionally named Caterpillar, Stanley Black & Decker, Ford and General Motors.

“Not solely is the Fed now not our enemy, it is more likely to grow to be our pal, assuming the financial system stays on its present, slower course,” Cramer stated. “This is the about-face that the bulls have been ready for.”

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Caterpillar and Stanley Black & Decker.