CNBC’s Jim Cramer on Tuesday suggested bullish investors will have a leg up under the Biden administration.
Reacting to comments Janet Yellen, President-elect Joe Biden’s Treasury secretary nominee, provided senators during her confirmation hearing earlier that day, Cramer welcomed her focus on addressing the U.S. job market.
“Over and over again, she made the case for a full-employment agenda to help people who don’t have jobs and need to put food on the table. That means Yellen wants to spend a lot of money,” the “Mad Money” host said.
Yellen, who served as Federal Reserve chair from 2014 to 2018, told lawmakers that she would prioritize, if confirmed for the post, American workers and rejuvenating the workforce in the country. Biden, whose presidency will start Wednesday, has proposed a new $1.9 trillion stimulus plan to give the economy a boost as the U.S. continues to battle through the coronavirus pandemic.
The spending would be “fabulous for the stock market,” Cramer said.
The unemployment rate is 6.7%, down from more than 14% in the middle of widespread lockdowns, but roughly flat since summer, according to the Labor Department.
“Right now, short-term, I feel that we can afford what it takes to get the economy back on its feet to get us through the pandemic and to relieve the burdens that it’s placing on households and small businesses,” Yellen said in the hearing.
If Yellen is appointed to head Treasury with Jerome Powell remaining at the head of the Federal Reserve, Cramer said the combo could be a one-two-punch for low interest rates and generous government spending in the coming years.
“When I hear Yellen talking about ‘big,’ it makes me feel like the bulls have a home field advantage with Yellen at the helm,” he said.
Cramer’s comments come after the stock market reversed course after posting losses last week. The Dow Jones gained 116 points, or 0.4%, to close at 30,930.52. The S&P 500 moved 0.8% to 3,798.91 and the Nasdaq Composite rallied 1.5% to 13,197.18.
He added that he thinks Yellen would be a positive for globalization, including for companies like Apple, while taking a less hostile approach to China than the Trump administration. Apple shares rose 0.54% to close at $127.83 during the session.
With the tech-heavy Nasdaq index running hard Tuesday, the so-called FAANG stocks all moved higher during the session.
Facebook was the biggest gainer of the group, with shares surging nearly 4% to $261.10. Google-parent Alphabet was behind the social media company with a 3.3% gain on the market. Netflix gained 0.8%, who posted strong subscriber growth in its quarterly report, but the stock jumped double digits in the aftermarket after the company posted strong subscriber growth numbers last quarter.
Amazon shares moved 0.5% higher to $3,120.76.
“The way we view FAANG is really incorrect. They’re portrayed as stocks you buy when the economy locks down and sell when the economy reopens,” Cramer said. “While they do just fine during lockdown, they also do just fine when we reopen, and that’s what people seem to realize today.”
Disclosure: Cramer’s charitable trust owns shares of Apple, Alphabet, Facebook and Amazon.