Jim Cramer reveals reopening stocks to play amid market rotation

Money is flooding into reopening plays as investors adjust their portfolios and become more optimistic of a recovery in the U.S. economy later this year, CNBC’s Jim Cramer said Monday.

Tech stocks, which benefited greatly from coronavirus restrictions that went in place last year, suffered big losses during the session as shares of companies in the travel and industrial spaces harmed by lockdowns rose.

Cramer advised that investors can take advantage of the uptrend in economic recovery stocks, though he suggested that maintaining exposure to growth stocks is ideal.

“It is not too late to make a big bet on the reopening stocks, but remember to sock away a couple of the better growth names on the way down, too,” the “Mad Money” host said after the market close. “This rotation won’t be ending any time soon though, but it will end and, eventually, you’ll need to be prepared for the other side of the trade.”

The comments come after a lop-sided day of trading where the Dow Jones Industrials Index climbed to a new high while the S&P 500 and tech-heavy Nasdaq Composite resumed last week’s declines.

The blue-chip index closed at 31,521.69 after inching up 27 points, or 0.09%. The S&P 500 experienced its fifth-straight day of losses, pulling back 0.77% to 3,876.50. The Nasdaq saw its worst day in nearly a month, falling almost 2.5% to 13,533.05.

The tech, consumer discretionary and utilities sectors were among the biggest losers that day, while energy and financial stocks outperformed.

While the U.S., which has the highest Covid-19 death toll in the world, reached another grim milestone earlier in the day with 500,000 casualties, the country’s daily new case count is declining from a surge during the holiday season. Investors are growing optimistic that governments will continue to relax restrictions on businesses.

“Think about what you’ll do when the economy reopens and, like most Americans, your balance sheet’s never looked better because there’s been nothing to spend your money on,” Cramer said. “That’s how you get half of this move, the consumer side. The other half? It’s about what the reopening means for business and what we do overseas.”

Some of Cramer’s favorite plays for this moment are in the travel sector, which has been severely hobbled by the pandemic. His picks include Disney, Marriott, Wynn Resorts, Southwest Airlines and Royal Caribbean. Each of these stocks, with the exception of Royal Caribbean, rose between 2.5% and 4.6% during the session. Shares in the cruise liner, despite posting a 99% year-over-year decline in fourth-quarter revenues before the market opened, spiked 9% to $86.23.

Royal Caribbean shares are up more than 27% in the past week.

With a return in travel, Cramer is also betting on more business for credit card companies like Visa, Mastercard and American Express. Their shares all moved between 1.75% and 3.22% during the session.

Estee Lauder, Caterpillar, Nucor and Simon Property Group round out his other favorite picks for the current market environment. With the exception of Estee Lauder, these stocks all climbed more than 3% on Monday.

“We all know the day will come, the day when we can see the light at the end of the tunnel. We knew the reopening stocks would jump ahead of time,” Cramer said. “That’s what’s happening right now. You’re no longer early with these names, but that doesn’t mean you’re late either.”

Disclosure: Cramer’s charitable trust owns shares of Disney and Mastercard.

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