Inflation is peaking, and it’s ‘nirvana’ for stocks, says Jim Cramer

CNBC’s Jim Cramer said on Wednesday that inflation is nearing a record high, which is good news for stocks that have been trampled on in recent months.

“The stock market…has totally seen peak inflation coming. I think you had to be deliberately obtuse to miss that because commodity prices crashed a while ago, but now it’s undeniable “, said the host of “Mad Money”.

Stocks jumped on Wednesday after the consumer price index showed inflation’s rise slowed in July from a year earlier. All major indexes rose, with the S&P 500 hitting its highest level since May and the Nasdaq Composite closing at its best since April.

Cramer said the spike in inflation bodes well for investors looking to recoup stocks they may have lost earlier this year.

“Peak inflation is nirvana for equities, especially for underserved stocks, like fast-growing tech players or financials or consumer discretionary names,” he said. “That means you can buy everything from Microsoft to Wells Fargo to Target.”

And while that doesn’t mean the economy is off the hook when it comes to entering a recession, a spike in inflation could help lift stocks even during an economic downturn, according to Cramer.

“Some companies will absolutely be hit by the coming recession, but others will see their stocks soar because they are worth more in an environment where inflation may finally be under control,” he said. .

Disclosure: Cramer’s Charitable Trust owns shares of Wells Fargo and Microsoft.

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