Stocks opened lower Tuesday after a spin out of technology stocks that closed the S&P 500 and Nasdaq Composite lower Monday.
Jim Cramer on Monday told Jeff Marks, senior analyst at Action Alerts PLUS, that as interest rates rise, investors are moving from technology stocks to banking, oils, industrials, and travel and leisure. “The split is so stark,” Cramer said.
As of Tuesday’s opening bell, the Dow Jones Industrial Average was down 129.40 points, the Nasdaq 169.90 points and the S&P 500 27.97 points.
Cramer and Marks discussed Fed Chair Powell’s testimony during retirement of Fed presidents, inflation, Pfizer (PFE) – Pfizer Inc. Report Received, Aurora (ACB) – Get Aurora Cannabis Inc. Report, Ford (f) – Get the Ford Motor Company Report and much more.
Watch the full interview with TheStreet Live at 10:00 a.m. ET in the video below:
Fed Watch continues
Federal Reserve Chairman Jerome Powell, along with Treasury Secretary Janet Yellen, will begin his two-day congressional testimony with an appearance before the Senate Banking Committee on Tuesday. In previously published comments, Powell said inflationary pressures could last longer than expected as supply chain bottlenecks put upward pressure on prices.
“As the economy continues to reopen and spending pick up, we are seeing upward pressure on prices, mainly due to supply bottlenecks in some sectors. These effects were larger and longer-lasting than expected, but they will subside, and if they do, inflation is expected to fall back toward our longer-term target of 2 percent,” Powell said.
Congressional testimony comes a day after the surprising retirement of two Fed presidents following stock-trading controversy among some top central bank officials.
Dallas Fed president Robert Kaplan and Boston Fed president Eric Rosengren announced Monday that they would resign.
Kaplan cited distraction from financial disclosure as the reason for his early retirement, while Rosengren cited health reasons.
Pfizer Submits Vaccine Data on Children Ages 5-11
Pfizer and BioNTech (BNTX) – Get BioNTech SE Sponsored ADR Report said they have submitted data to the US Food & Drug Administration of a late-stage trial of the coronavirus vaccine in children ages 5 to 11.
Pfizer said a trial of 2,268 participants showed a “favorable safety profile and elicited robust neutralizing antibody responses using a two-dose regimen of 10 µg doses” of the ‘comirnaty’ vaccine, The streetMartin Baccardax reports.
A formal submission to apply for Emergency Use Authorization (EUA) of the companies’ COVID-19 vaccine in children ages 5 to 12 is expected in the coming weeks, Pfizer said in a statement.
Ford shakes up its electric initiative
Ford and battery supplier SK Innovation announced plans to invest $11.4 billion in building a new mega campus in Tennessee and Twin Battery Plants in Kentucky that would create 11,000 jobs. The streets Katherine Ross reports that.
“Now is our moment — our largest investment ever — to help build a brighter future for America,” said Ford CEO Jim Farley. “We are now moving to deliver groundbreaking electric vehicles to many rather than a few. It’s about creating good jobs that support American families, an ultra-efficient, carbon-neutral manufacturing system, and a growing business that delivers value to communities, dealers and shareholders.”
As of the opening of trading, Ford shares rose 3.74% to $14.69.
Ford holds on Jim Cramer’s Action Alerts PLUS Charity Portfolio.
Aurora Sales going up in smoke
At the close of trading Monday, Aurora Cannabis reported total net sales of C$54.8 million ($43.4 million), which sequentially held steady, declining 19% year over year. The cannabis company is expected to report sales of C$56.4 million, according to analysts polled by FactSet.
The company cited ongoing challenges in the Canadian recreational market for sales that fell more than expected. “Given the ongoing challenges in the Canadian adult recreational market, our broad diversification into the domestic medical, international medical and adult recreational segments provides us with underlying strength, stability and growth opportunities in an evolving global cannabinoids industry,” said CEO Miguel Martin in a statement.”
As of the opening of trading, Aurora stock rose 0.70% to $6.43.
Looking for the ‘best of breed’
As he continued to sell tech stocks in an increasingly split market, Cramer turned to Real Money to claim that: some tech names are worth holding onto.
“Great companies prevail. Best-of-breed companies don’t go away and you can’t sell them because they’re built to last and have the best management,” Cramer wrote.
Sparknotes: Before you sell the Apples of the world, think about what you’re actually selling.
Hear what Jim Cramer only tells his members Action Alerts PLUS investment club in Daily overview of Tuesday.