Jim Cramer’s investment playbook for the Covid omicron variant

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CNBC’s Jim Cramer on Monday laid out his investment playbook for two economic scenarios that could materialize as a result of the Covid omicron variant.

The heavily mutated variant has spooked some investors, particularly during Friday’s holiday-shortened session in which the Dow Jones Industrial Average recorded its worst day since October 2020. However, U.S. stocks finished higher Monday, as President Joe Biden indicated broad economic lockdowns currently aren’t needed.

Cramer agreed with Biden, saying strict restrictions akin to earlier stages of the pandemic are very unlikely. However, the “Mad Money” host said the Covid omicron variant may have an effect on the economy and investors need to prepare accordingly.

Slowdown

Cramer said he also likes tech giants Netflix and Alphabet to keep succeeding in this possible scenario.

Outside of technology, Cramer said utility companies like American Electric Power are good places to be, as well as health-care plays like UnitedHealth Group.

Cramer said a more-risky approach for investors includes homebuilders, which benefit from an interest rate hike being off the table, and retailers that benefit from spending around the house.

Bounceback

Similarly, Cramer said to look at hotel operator Marriott the next time negative omicron news causes a pullback in this basket of stocks. Apparel-focused retailers like Macy’s and American Eagle Outfitters also should be in good shape if the U.S. economy continues to return to something resembling normalcy, Cramer said.

“I’m not necessarily saying the economy will be able to keep on chugging without overheating now that we’ve got a new variant, but it’s a real possibility and you need to be prepared for it,” he said.

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https://www.cnbc.com/2021/11/29/jim-cramers-investment-playbook-for-the-covid-omicron-variant.html