CNBC’s Jim Cramer parsed Wednesday’s session and expressed concern about the sectors that led the market’s gains, saying “the wrong stocks are going higher.”
“This was a market where the winners were consumer packaged goods stocks and the oils – the worst possible leadership groups,” he said. “The consumer packaged good plays are recession stocks, the oils are zero-sum – that’s the kind of relationship they have with the rest of the economy.”
In a good market, Cramer said, companies should rally broadly, led by growth stocks, while cyclical names also go higher but take “a back seat.” He said it’s positive for the transport sector to advance because those stocks can represent the health of the economy. But most of all, Cramer said he wants to see banks rally. When banks are doing well, he explained, businesses are expanding, companies are coming public, merger activity is strong and individuals are taking out loans, perhaps to buy houses.
But on Wednesday, bank stocks went lower even as many reported decent quarters, Cramer said. He suggested Wall Street is wary because of President Donald Trump’s threat to cap credit card rates at 10%. Many investors believe that such a cap could bring down the entire economy, Cramer added, as many people would not qualify for credit cards. The cap could hurt not only banks, but also sectors like retail, travel and consumer discretionary, he continued.
He said he doesn’t think this cap will actually happen, but “it’s still a risk and it’s not something shareholders want to worry about.”
Cramer indicated this market dynamic might not persist. However, he recommended investors “need to have some hedges,” and own stocks that can do well in a weaker economy, including consumer packaged goods names like Procter & Gamble.
“We have to hope that these two new leadership groups aren’t long lasting,” Cramer said. “I don’t think they will be.”

















