Shares of Merck, once the leading pharmaceutical company in the world, have been on an uptrend since 2018, thanks to the introduction of its Keytruda cancer treatment for lung cancer. The stock gained nearly 20% between April and the end of August as the company explores expanding its use for other tumors, Cramer noted.
Yet, the stock has dropped below $82 from a high of $87.35 in late August on little news, the host said. It doesn't help that Merck won't benefit from a potential interest rate cut that investors are anticipating from the Federal Reserve, which appears more likely in the wake of Friday's weaker-than-expected jobs report.
"I think it's the rotation out of stocks that thrive in a slowing economy and into stocks that thrive in an accelerating economy," Cramer said. "In other words, Merck's gone out of style on that Wall Street fashion show ... Merck's not going to benefit from the expected rate cut, so the stock has lost its appeal, for now."
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Source: CNBC - 🏆 12. / 72 Read more »