Momentum shares like Tesla, Zoom and SPACs are stalling

The same soaring stocks that pulled investors public last year left the newcomers in the dark, CNBC’s Jim Cramer said Monday.

“The House of Pleasure has walls made of traditional stocks that are being scrutinized, but the House of Pain has fallen apart,” said the Mad Money host.

Cyclical stocks, which are good for the broader economy, have caught fire and propelled the stock market to new highs, Cramer said. He pointed to stocks like Emerson Electric, Ingersoll Rand, Honeywell, PPG, Home Depot, Lowe’s, JP Morgan Chase, and Wells Fargo.

Each of these stocks, minus Honeywell, outperformed the market year to date. Wells Fargo was the group’s strongest performer, up 45%.

“Then you have the second market, dominated by the younger cohort, drawn to no-commission trading, an easy-to-use Robinhood app, and some very exciting stocks that made people fortune last year,” said Cramer.

Tesla and Zoom stocks struggled to maintain momentum after posting impressive numbers in 2020. Zoom is down more than 8% this year, down 45% from its October peak. Tesla stock has only risen 1% since the start of the year. The stock last traded at $ 714.63, down around 21% from the end of January.

Cramer also said that many SPAC games are included in the “House of Pain”. Some of those are QuantumScape, Nikola, and Lordstown Motors, whose shares fell between 32% and 63% this year.

Disclosure: Cramer’s charitable foundation owns shares in Honeywell.

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