How is the rise of GLP-1 weight loss drugs affecting market action? Jim Cramer explains

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CNBC's Jim Cramer on Wednesday said many on Wall Street are already anticipating the effects of GLP-1 weight loss drugs.

CNBC's Jim Cramer on Wednesday said many on Wall Street are already anticipating the impact of GLP-1 drugs, sending down the stock of certain companies, like those involved with diabetes management.

"An institution's goal is to anticipate, not the action itself, but that there'll be others reacting soon," he said. "And they have to get out ahead of those late reactors."on Wednesday explained how GLP-1 drugs are influencing market action. He observed that Wall Street is already anticipating their affect on certain companies.

"An institution's goal is to anticipate, not the action itself, but that there'll be others reacting soon," he said.GLP-1 drugs were initially approved to treat diabetes, but many found off-label use for weight loss and obesity. Popular GLP-1 drugs includeto asses the impact of these drugs, they are already affecting stocks, Cramer said.

According to Cramer, many investors don't wait to see how the new drugs will weigh in companies earnings reports. Instead, they anticipate negative action and sell off stocks, Cramer said. "I know it seems superficial, kneejerk-even, but money managers are kneejerk and superficial people. And in the wild cases of Wegovy and Lilly's Mounjaro, the more superficial and the more kneejerk they were, the more money they saved," he said.

 

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