Morning Bell With Jim Cramer: Buy Stocks That Are Down 5%

Jim Cramer shares insights about spotting stocks to buy, stimulus deal, and President-Elect Joe Biden's different approach to Coronavirus.
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Dow futures are mixed as markets around the world re-price risk in the wake of Pfizer's coronavirus vaccine breakthrough.

In the last episode of Mad Money, Jim Cramer said that Pfizer's news about a vaccine doesn't mean it's time to sell all of your stay-at-home stocks quite yet. 

TheStreet's Katherine Ross and Cramer are talking about spotting stocks to buy, stimulus deal, and how President-Elect Joe Biden will approach Coronavirus differently.

Buy Stocks That Are Down 5% to 10%

In October, Abbott Labs shares rose after the health-care giant reported stronger-than-expected third-quarter results and provided full-year guidance to the upside.

The company reported a net income of $1.23 billion, or 69 cents a share, up from $960 million, or 53 cents, in the year-earlier period. The Abbott Park, Ill., company reported the latest adjusted earnings at 98 cents a share.

Cramer said that investors can spot a stock to buy by looking for stocks that are down 5% to 10%. 

He gave an example of Abbott Laboratories  (ABT) - Get Report, a principle tester for COVID-19, which is down and therefore is a buy, while Honeywell  (HON) - Get Report is a sell because nothing new is happening with the company.

Stimulus Remains Critical

On Monday, Pfizer Inc.  (PFE) - Get Report shares surged higher after the drugmaker said it developing coronavirus vaccine was 90% effective in late-stage trials and plans to seek Emergency Use Authorization from U.S. health officials later this month.

Albert Bourla, Pfizer's CEO, said the vaccine's success could be the most significant medical advance the world has seen in the past 100 years.

Cramer said that a stimulus is needed for small businesses to survive. However, even with the news about the Pfizer vaccine, a stimulus deal may not be reached because Senate Majority Leader Mitch McConnell doesn’t want one, according to Cramer.

How Joe Biden Will Approach COVID-19

Cramer said that Biden will listen to concerns and news relevant to COVID-19 and accept it unlike Donald Trump “who wasn’t willing to listen.” He added that Biden will order a “correct lockdown” to places where people could get Covid-19 such as gyms and restaurants.

“We shouldn’t lock down schools, because those are not places where you get COVID-19,” he said.

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