Jim Cramer -- Avoid Consumer Products Stocks, REITs When Rates Rise
It's looking more and more like the Federal Reserve will finally make a move on interest rates at its December meeting, which is no doubt why several questioners from social media Tuesday wanted to to ask Jim Cramer, host of CNBC's "Mad Money," which stocks are going to get hurt in a rising rate environment.
Cramer, also TheStreet's Action Alerts PLUS portfolio manager, gave an answer that may not make investors happy: He expects the vast majority of stocks will go down if the Fed raises rates next month.
The most vulnerable sectors, he suggests are consumer products companies, real estate investment trusts, and utilities. However, he said bank stocks will go up, and if a company has superior growth, its stock should bounce back after an initial selloff. Cramer also noted that while he thinks a rate hike is coming, the economy does not need one, and he doesn't want there to be one.
Another viewer asked why Apple (AAPL) - Get Report stock was falling. Cramer responded that brokerage firm Credit Suisse put out a report about Apple's supply chain, questioning its order flow. But he lacks confidence in that report, and he cautioned investors against playing the "trading game" with Apple, which he likes as a long-term holding.
Viewers also asked about two retail stocks which have fallen: Under Armour (UA) - Get Report and Foot Locker (FL) - Get Report . Cramer said Under Armour's sales have been hurt by unseasonably warm weather, and Foot Locker has had a big run -- he advises ringing the register on it ahead of its earnings report.
Cramer was also asked about BP (BP) - Get Report , which he said was a challenged company compared to ExxonMobil (XOM) - Get Report and Chevron (CVX) - Get Report , especially if oil prices stay low for a long time. He added that Exxon and Chevron have had good runs and he's not a buyer right now, but if the stocks come in, investors should look at Exxon, as well as Occidental Petroleum (OXY) - Get Report .
Asked about Alibaba (BABA) - Get Report , Cramer responded that executive Jack Ma will be on CNBC Wednesday, so he wants to hear what he has to say. Finally, when asked about China Mobil (CHL) - Get Report , Cramer said he does not recommend any Chinese stocks because the market there is subject to so much manipulation by the Chinese government.
Cramer answers viewers' social media questions each day on TheStreet TV. You can find him on Facebook (FB) - Get Report , and he's @JimCramer on Twitter (TWTR) - Get Report . Use hashtag CramerQ.
At the time of publication, Jim Cramer's charitable trust Action Alerts PLUS was long TWTR.