CNBC’s Jim Cramer explained Monday that he believes the Dow Jones Industrial Average will continue to outperform the Nasdaq Composite and the S&P 500 next year.
“As we head into the end of the year, Wall Street tends to crowd in the biggest winners, which is why I expect the Dow Nasdaq and S&P to be higher at least through January, possibly much longer.” Keep doing better.” Told.
Here are the reasons he listed for the Dow’s exceptional performance:
- Markets think the Federal Reserve may make a soft landinglikely to be caused by encouraging inflation data And Minutes from the latest meeting of the central bank,
- classically cyclical stocks are not so cyclical anymore, Especially when consumers continue to splurge on travel. In addition, many cyclical companies in the Dow are likely to benefit from the bipartisan infrastructure bill and the CHIPS Act, Cramer said.
- The supply chain problems that plague the Dow Companies appear to be easing, If recent income report Are there any signs?
- In recent weeks the stronger US dollar has weighed down, Putting pressure on Dow companies with large international exposure.
- Long-term interest rates are also declining, Which has been a “major boon” for many dividend stocks in the Dow.
The Dow is down about 6.85% for the year, while the S&P 500 and Nasdaq are down 16.8% and 29.4%, respectively.
Cramer explained that the blue-chip index has performed best this year because it’s full of old-fashioned, profitable companies that return cash to shareholders.
While the S&P 500 suffered more because it has a mix of older companies and newer, speculative ventures, the Nasdaq is loaded with the latter and declined most as a result.
Cramer said comparing how the major indexes performed this year and how that affected their movements is important when examining stocks’ performance this year. “I think this is the most important story of 2022,” he said.