CNBC’s Jim Cramer said Thursday that investors will want to have money in the stock market if Congress approves another coronavirus relief bill.
“If we get a stimulus package and you’re out of the market, you will feel awful,” Cramer said on “Squawk on the Street.” “I do feel the stimulus package is very hard to get. But if we do get it, you can’t be out of this market.”
Democrats and Republicans in Washington have been locked in a stalemate since late July after key provisions of the March $2.2 trillion CARES Act expired. The two sides are largely at odds over the scale and scope of an additional relief package, with Democrats favoring more expansive legislation while GOP negotiators have been pushing for a more limited bill.
President Donald Trump, who took some executive actions last month designed to extend aid to unemployed Americans, indicated at a news conference Wednesday evening that he would be willing to support legislation around $1.5 trillion. House Speaker Nancy Pelosi, D-Calif., has repeatedly called on Republicans to support a bill worth around $2 trillion.
On Wednesday morning, White House chief of staff Mark Meadows, one of the administration’s main stimulus negotiators, told CNBC he was “probably more optimistic about the potential for a deal in the last 72 hours than I have been in the last 72 days.”
Cramer has warned that without additional stimulus for the U.S. economy, devastated by business restrictions designed to limit the spread of Covid-19, the stock market’s rally from its March 23 pandemic-low could be a risk.
Tech stocks, which have been the main driver of the market rebound, experienced weakness this month, pushing the Nasdaq last week briefly into a correction by dropping over 10% from its record high on Sept. 2. Tech stocks were dropping again on Thursday.
Cramer reiterated Thursday, before the stock market opened, that investors should probably take some profits in tech, even if there is a stimulus bill approved. “Just cut down the exposure to the highest tech stocks,” he suggested.
Also on Thursday, Cramer expressed concern about the signal that the doubling of Snowflake stock on its first day of trading sends about the overall market.
“I think that the amount of money that the institutions had to spend to be able to get their second half of Snowflake after they get their first part on the IPO shows that there is very little discipline,” Cramer said earlier on “Squawk Box.” “That does not bode well.”