Prominent market commentator Jim Cramer believes that a sell-off in tech stocks is over-shadowing a bull market in other names.
“We had a very traditional bull market based on the dollar and interest rates peaking, both of which tend to be terrific for stocks for a whole host of reasons,” Cramer said according to a CNBC report.
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“The relentless beat-down in the Teslas and Salesforces and Amazons” is obscuring it, he added.
Major Wall Street indices recorded losses on Thursday after U.S. unemployment data showed the labor market continues to remain resilient, a factor considered to be crucial in driving the Federal Reserve’s future policies. The weekly jobless claims fell 15,000 to 190,000 while continuing claims increased 17,000 to 1.647 million.
Price Action: As a result, the SPDR S&P 500 ETF Trust SPY closed 0.73% lower while the Invesco QQQ Trust Series 1 QQQ lost 0.98%. Cramer pointed out that shares of companies including Visa Inc V, Mastercard Inc MA, JPMorgan Chase & Co JPM and Boeing Co BA had bottomed late last year.
“These huge stocks have had monster, happy moves in the last few months – what we’ve seen this week is merely an orderly decline to burn off their vastly overbought condition,” he said.
Indeed, some of these names have made some decent gains over the last one month. Visa and Mastercard shares have gained close to 7% while Boeing stock has surged over 9% in the period.
“Let’s remember, there are two tracks out there. The tech track that can’t seem to find its footing, rooted in about 30% of the market, and the other track, which found its footing months and months and months ago,” Cramer added.