Cramer suggests using market weakness as a buying opportunity


  • CNBC’s Jim Cramer linked the stock market’s weakness to the increased competition offered by US government bonds.
  • He suggested that investors take advantage of this market weakness and buy stocks that can perform well even in a high yield environment.

CNBC’s Jim Cramer said Tuesday that investors should view the stock market’s recent weakness as a buying opportunity despite increased competition from U.S. government bonds.

Treasury yields have been rising this month, with the yield on the benchmark 10-year note rising to 4.566% on Tuesday, a new 15-year high. The 30-year Treasury also hit a yield of 4.7% on Tuesday, a level not seen since 2011. The S&P 500 has fallen 5.2% so far in September, while the tech-heavy Nasdaq has declined nearly 7%.

While an additional rise in yields has pressured stocks in September, Cramer argued that interest rates will eventually peak at some point after the Federal Reserve gets a handle on inflation. “It means you need to buy some stocks here, not sell them,” Cramer said.

He added, “Don’t do it all at once. Do it extensively. Some here. Some less. Because if Treasury yields go to those levels, you want enough cash to buy more stocks.”

Cramer suggested investors look for companies that can perform well and generate profits even in a high-rate environment. For Cramer, investors should seek out companies like his longtime favorite, Nvidia, saying, “I don’t want to find more 10-years. I want to find more Nvidia for you.”

Cramer said, “You buy stocks when you’re trying to get rich; you buy Treasuries to stay rich.” “I think a mix of the two is fine, but if you go all in on bonds now, I think you’re liable to miss some real good in stocks, even though it seems absolutely impossible. It’s always been that way. Seems like it never happens.”

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Disclaimer The CNBC Investing Club Charitable Trust owns shares of Nvidia.

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