June 08, 2020 "Information
The coronavirus pandemic and corresponding lockdown
made way for “one of the greatest wealth transfers
in history,” CNBC’s
The stock market is
rising as big business rebounds from state-ordered
stoppage of nonessential activity, while small
businesses drop like flies, the “Mad
Money” host said.
“The bigger the business, the more it moves the
major averages, and that matters because this is the
first recession where big business … is coming
through virtually unscathed, if not going for the
gold,” he added.
The comments come after Wall Street took a
breather during a mixed day of trading in the midst
of hopes of a quick recovery from the pandemic. The
Dow Jones Industrial Average ticked up almost 12
points to 26,281.82 during the session. The
S&P 500 and
Nasdaq Composite both finished the day in the
red by less than 1%.
Investors reacted to worse-than-predicted
economic data ahead of the May jobs report Friday.
The Labor Department reported on Thursday that new
jobless claims the past week came in at 1.877
million, while experts expected a read of 1.775
Despite the ongoing economic woes, the S&P index
of 500 large-cap companies, which is considered a
benchmark for the stock market, is within striking
distance of its levels from the start of the trading
year. Since bottoming near 2,191 in March, the index
is up about 42%.
Nasdaq 100 has recovered all of its losses from
the coronavirus meltdown and set a new high on
Thursday. Many investors are betting on a V-shaped
economic recovery, Cramer said.
“I think we’re looking at a V-shaped recovery in
the stock market, and that has almost nothing to do
with a V-shaped recovery in the economy,” he said.
In order to help small businesses make it to the
other side of the pandemic, the federal government
needs to pass another stimulus package, given the
social distancing mandates that remain in place, he
added. The American Bankruptcy Institute said
Thursday that U.S. Chapter 11 bankruptcies in May
ballooned by 48% compared to a year ago.
“That’s that pesky real world asserting itself,
but the only big bankruptcy we’ve seen int he stock
Hertz,” Cramer said.
Cramer said it still only scratches the surface
of what impact the halt in global economic activity
will have on the country.
The Senate on Wednesday sent a bill to be signed
by President Donald Trump to
relax rules on how businesses can spend relief
funds provided by the Paycheck Protection Program.
“The companies that took the money just got a big
break: they only need to spend 60% on their
employees to get the loans forgiven, down from the
original 75%. That’s important, as most small
businesses fail because they can’t afford to pay the
rent,” Cramer said.
“But, in the end, the stimulus package probably
won’t be enough, for one simple reason,” he said.
“It’s not going to work because of social