Cramer sees potential for roaring 20s-type boom as Covid concerns ease
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CNBC’s Jim CramerOn Wednesday, he said that the U.S. economy could boom when Covid concerns recede much as it did following the 1918 flu pandemic. He stated that he believes we can experience an economic boom similar to post-World War I.
The 1918 flu pandemic hit the United States shortly after its end. The Roaring 20s were born as a result of the pandemic that struck more than 100 years earlier.
The Dow rose 500% in the period 1921-1929, accompanied by skyrocketing growth. Gary Richardson is a former Federal Reserve historian. described the crash in an essay he co-wrote.
“The great boom came to an abrupt halt with a devastating bust. Nearly 13 percent of the Dow fell on Black Monday, 28 October 1929. Black Tuesday was a day that the Dow fell nearly 13%. The Dow lost nearly half its value by mid-November. Through the summer 1932, the Dow lost almost half of its value. In the end, it closed at 41.22. This was its lowest closing price in the 20th century and 89 percent lower than its peak. November 1954 was the last time that Dow returned to pre-crash levels.
Amazingly, however, the Dow closed Tuesday less than 2 percent away from its Nov. 8 record close of 36 432. Going into Wednesday’s trading session, the S&P 500 and Nasdaq were 0.4% and 2.3% away, respectively, from their record closes last month.
Cramer stated Wednesday that the market should focus on the strength of the economy and not the Covid pandemic or whether there will be new strains like the highly mutated Omicron strain.
Citing Pfizer’s announcementCramer confirmed that all three Covid vaccine doses were effective in neutralizing the omicron. Cramer added that it was an acceptable risk, especially considering the availability of many coronavirus therapies and potential oral treatments. Merck PfizerGet cleared as soon as possible. Wall Street gets a boost from the Pfizer news. The market quickly fell after Tuesday’s strong rally.
CNBC host Cramer claimed that there is a “boom developing” in the economic sector. Travel is expected to rise again. “I think that international travel will be the next one,” he said, adding that other stocks connected to an economic recovery and a return to normal will reap the benefits.
Cramer suggested that you look at the stock prices that were beaten in the condensed session just after Thanksgiving. These stocks are where the first reports on the omicron variant emerged, the one discovered in South Africa.
Travel-related stocks suffered the most on Black Friday. Fears of a slowdown in economic activity, and the decline in interest rates caused bank shares to fall. The global economy impacted industrials declined. Overall, the Dow fell 905 points Nov. 26, which kicked off a series of major ups/downs that ended last week.
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