Investors should take heed of Federal Reserve Governor Lael Brainard’s comments and sell some holdings, CNBC’s Jim Cramer said on Tuesday.
“This is not a sale of anything. … In fact, the healthcare stocks and oils here are still very attractive and I would invest more money if they fall. Oil because of supply problems, drugs because they’ We’re pretty much immune to a Fed-mandated recession. I’m just saying I’m becoming more conservative,” said the Mad Money host.
“If you have something you don’t like, this is a good time to sell it. We’ve gone up a lot. I think you will get good prices afterwards. When the Fed’s biggest dove turns into a bird of prey, you better watch out,” he added.
Cramer’s comments come after Brainard called for aggressive anti-inflation measures Tuesday, shifting from her usual stance in favor of low interest rates. Brainard, in a speech written for a Fed discussion in Minneapolis, said policy action could include tightening the balance sheet soon, and hinted that rate hikes this year are more than the 0.25 percentage point increase introduced in March could be.
Investor fears of an economic slowdown rocked markets on Tuesday following Brainard’s comments. The Nasdaq Composite fell 2.26% and the Dow Jones Industrial Average fell 0.8%. The S&P 500 lost 1.26%.
All three market indices rose on Monday, led by the tech-heavy Nasdaq. Cramer said the market’s movements this week were a sign that investors were confused.
“I don’t like it when you have a market where traders buy all the semi-finished products and throw away the health products on Monday, and then do the opposite on Tuesday,” Cramer said. “It’s a classic sign that nobody knows what to do,” he added.
“I will not allow myself to ignore this wake-up call. … I will tuck in my horns and sell with zeal,” he said.