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Back in late April, CNBC’s Jim Cramer created an index of stocks he believed were positioned to benefit from the reeling pandemic-era economy, including household names like Netflix NFLX, -2.12% , Johnson & Johnson JNJ, -0.45% and Amazon AMZN, -1.49% .
The index, which was up almost 5% as of Tuesday’s close, has lagged behind the major benchmarks amid the stock market’s big rebound. But Cramer isn’t so sure that will last.
“The market’s gotten more confident that we’ll have a speedy, V-shaped recovery … and that makes the recession stocks less attractive,” the “Mad Money” host said on Tuesday. “But, I’ve got to tell you, I think it’s too soon to give up on the recession stocks. As much as I hope we’ll have a rapid recovery where America swiftly gets back to normal, it’s tough to bet on it.”
With that in mind, Cramer swapped 10 of the 100 stocks in the index for 10 new additions “that are better suited to this moment and more relevant,” he said. “I want to keep most of our defensive exposure. You don’t want to get rid of it all. You need to be protected in case something goes wrong.”
These stocks are out: Becton Dickinson BDX, -0.11% , Digital Realty DLR, -2.06% , Freshpet FRPT, +0.83% , Inovio Pharmaceuticals INO, -9.89% , Inseego INSG, -6.96% , Kimberly-Clark KMB, +1.09% , NextEra Energy NEE, +1.07% , Owens & Minor OMI, +4.28% , Roku ROKU, -2.90% and Snapchat parent Snap SNAP, -3.24% .
These stocks are in: DataDog DDOG, -6.90% , Splunk SPLK, -2.82% , Twilio TWLO, -4.26% , Etsy ETSY, -1.55% , Wix.com WIX, -2.16% , Chegg CHGG, -5.81% , Target TGT, -0.19% , S&P Global SPGI, -0.47% , Palo Alto Networks PANW, -1.74% and Emergent EBS, -5.35% .
“With those 10 changes, I’m feeling pretty better about the Cramer Covid-19 Index,” Cramer said, adding a caveat. “But — and this is a very big but — if the reopening goes smoothly and the economy comes roaring back, we’re going to need to abandon this whole index and swap into a totally different cohort of recovery stocks. I don’t think we’re there yet.”
Watch the segment:
The broader stock market continues to show some strength this week, with the Dow Jones Industrial Average DJIA, +0.98% up again Wednesday after a strong showing in the prior session. The S&P 500 SPX, +0.22% and Nasdaq Composite COMP, -0.84% , however, were in the red.
