Cramer says these 5 factors could help the Dow continue to outperform other major indexes.

CNBC’s Jim Cramer on Monday explained why he thinks the Dow Jones Industrial Average will continue to outperform the Nasdaq Composite and S&P 500 next year.

“As we get closer to the end of the year, Wall Street tends to crowd out the biggest winners, so I expect the Dow to continue outperforming the Nasdaq and S&P until at least January, and possibly even much longer,” he said. he. said.

Here are the reasons he listed for the Dow’s outstanding results:

  1. The market seems to believe the Fed can make a soft landingprobably because of the encouraging data on inflation and the minutes of the last meeting of the central bank.
  2. Classic cyclical stocks are no longer so cyclical especially as consumers continue to spend money on travel. In addition, several cyclical companies in the Dow are likely to benefit from a bipartisan infrastructure bill and the Chip Act, Cramer said.
  3. The supply chain problems that have plagued Dow companies appear to be easing. if recent earnings reports are any indication.
  4. The strong US dollar has weakened in recent weeks, relieving pressure from Dow companies that have a large international presence.
  5. Long-term interest rates are also falling, which has been a “great boon” for many dividend stocks in the Dow.

The Dow is down about 6.85% for the year, while the S&P 500 and Nasdaq are down 16.8% and 29.4%, respectively.

Cramer explained that the main reason the blue-chip index has performed the best this year is because it is full of old-fashioned, profitable companies that are returning money to shareholders.

While the S&P 500 suffered the most as it mixed old companies and new speculative ventures, the Nasdaq was filled with the latter and fell the most as a result.

Cramer added that comparing the performance of the major indexes this year and what has driven them is critical when looking at stock performance this year. “I think this is the most important story of 2022,” he said.

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