Momentum stocks like Tesla, Zoom and SPACs stand still

The same high-flying stocks that drew investors to the stock market last year left newcomers in the cold, CNBC’s Jim Cramer said Monday.

“The house of pleasure has walls of traditional stocks that are under supervision, but the house of pain is falling apart,” the ‘Mad Money’ host said.

Cyclical stocks used in the broader economy have caught fire, driving the stock market to new highs, Cramer said. He pointed to stocks such as Emerson Electric, Ingersoll Rand, Honeywell, PPG, Home Depot, Lowe’s, JP Morgan Chase and Wells Fargo.

Each of these stocks, minus Honeywell, has surpassed the market year so far. Wells Fargo, 45% higher, was the strongest player in the group.

“Then you have the second market, the one dominated by the younger group traded by no commission, an easy-to-use Robinhood app and some very exciting stocks that people earned last year, said Cramer.

The shares of Tesla and Zoom struggled to maintain momentum after achieving striking figures in 2020. Zoom is down more than 8% this year and 45% from its peak in October. Tesla shares have risen just 1% since the beginning of the year. The stock last traded at $ 714.63, up about 21% from the end of January.

Cramer also said many SPAC plays were filmed in the ‘house of pain’. Some of these include QuantumScape, Nikola and Lordstown Motors, which have seen shares fall between 32% and 63% this year.

Disclosure: Cramer’s charity owns shares in Honeywell.

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