Stay away from software hoards of “fool’s gold”

CNBC’s Jim Cramer on Wednesday advised investors to stay away from software stocks.

“Data has become gold for fools. Data is iron pyrite. When you hear the word ‘data’ and see losses, I don’t care how big the company is, I don’t care what software it has, that’s bad,” he said.

Shares fell on Wednesday after the Federal Reserve reaffirmed its hawkish stance on inflation.

The central bank also raised interest rates by 75 basis points. The decision comes on the heels of numbers suggesting the labor market remains strong, including hotter-than-expected October private sector employment data and Tuesday’s JOLTS report.

Cramer said that despite Wall Street’s hopes that the Fed will sooner or later roll back its aggressive interest rate hikes, that is unlikely to happen until wage inflation and employment ease.

He also reiterated that investors should target recession-resistant stocks that can weather the Fed’s tightening cycle.

“Odds [are] that these companies simply cannot survive [Fed Chair] Jay Powell at the blackjack table. They will go broke,” he said.

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