CNBC's Jim Cramer said Monday the recent reshuffling on Wall Street is about more than a resurgence in smallcap stocks.
"This market is not experiencing a smallcap rally, it's experiencing a rally in everything else but the tech titans. The megacaps have become what we call 'share donors' for virtually every other stock in the market," he said. Cramer said McDonald's managed to jump after an earnings miss because the market is broadening, and investors were intrigued by the company's plan to bring in more customers."This market is not experiencing a smallcap rally, it's experiencing a rally in everything else but the tech titans. The megacaps have become what we call 'share donors' for virtually every other stock in the market," he said. "It's not a rotation at all.
Cramer suggested the market isn't being led solely by a few smaller-cap companies that are performing well. Instead, he said, large institutions may be buying poor quality small stocks "as part of a larger basket" with indexes like theHe continued, stressing that this is "not just a small cap romp." There are also larger companies that have seen huge gains recently as part of the market broadening, he said, such as.
"There's no doubt that when Wall Street was still in love with the Magnificent Seven, a stock like McDonald's would have been pelted into submission after reporting such dismal numbers," Cramer said. "But the market's fallen out of love with the seven and, frankly, nobody was truly disappointed by McDonald's because everyone expected them to have bad numbers"
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