CNBC’s Jim Cramer announced on Wednesday that his nonprofit investment portfolio of dozens of big cap stocks could outperform under one administration of Joe Biden than under any other tenure of President Donald Trump.
“When it comes to earnings, prospects and growth, I was absolutely amazed that two-thirds of my nonprofit trust’s stocks would likely make more money under Biden than under Trump.”Bad money“said the host.” And given that Biden comes out on top in the polls, that might be reflected in the averages. “
Cramer’s charitable foundation, Action Alerts Plus, has invested more than $ 2.5 million in 30 stocks. The diversified list of stocks that Cramer manages with a team of market gurus consists of technical names such as Apple, Software companies like Foreclosure, Defensive games like PepsiCo and health stocks like CVS health.
The U.S. relationship with China is the common denominator in why Cramer projects, which would see most of the companies in its philanthropic portfolio deliver better returns, if Biden, a former vice president, wins the November 3rd election. One of the biggest benefits would be that corporate mergers that need to be approved by Chinese regulators would have a better chance of gaining approval from a less hostile administration in the White House.
“Take away the trade war and Broadcom can do big business again, which China is eager to sign,” he said. “We know that Chinese regulators got a foothold in the last major acquisition of Nvidia, Mellanox, even though there were no legitimate antitrust concerns. They could do the same with Arm Holdings, but a Biden presidency would make that a lot easier.”
A month ago chip manufacturer Nvidia announced that SoftBank would pay $ 40 billion to acquire Arm Holdings, which develops chips for iPhone and Android phones. The deal needs to be approved by the US, UK, European Union and China.
However, Cramer made it clear that what is good for the majority of the stocks in his portfolio wouldn’t necessarily be good for the broader market.
“I’m not saying Biden would be better for the stock market as a whole. The Trump White House was very aggressive when it came to making the market happy,” said Cramer. “I’ve never seen anything like it.”
Since taking office in 2016, Trump has taken tough stances on China, which has the world’s second largest economy, in hopes of reducing the trade deficit and boosting domestic production. Trump tried to fight the trade practices used by China. The country has been accused of stealing the intellectual property of American companies that want to do business in the country. China has denied the allegations.
In 2018, in particular, he waged a protracted trade war with China, which Cramer generally advocated, and which resulted in a phase one trade deal in January. The far-reaching tariffs imposed on goods imported from China both American businesses and consumers affected.
“When you drill down into specific industries, I don’t have much appetite for stocks that would benefit from a second Trump term,” Cramer said. “Stocks like the non-investable coal industry, the oil industry, the gas industry … regardless of what happens in Washington.”
Disclosure: Cramer’s charitable foundation owns interests in Apple, Salesforce, Nvidia, Broadcom, PepsiCo, and CVS Health.
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