CNBC’s Jim Cramer reviewed why certain stocks that are usually considered safe bets — like pharmaceuticals or consumer packaged goods — weathered losses on Wednesday.
“In a very uncertain tape for what used to be called ‘safety stocks,’ I’d rather just own a piece of paper like the 10-year Treasury, where, if worst comes to worst, at least I get my money back,” he said.
Cramer pinpointed a few reasons several stocks with solid dividends declined today — namely, rising bond yields, especially the 10-Year Treasury. He also stressed that Robert F. Kennedy Jr., the Health and Human Services secretary, is a “wild card.” Investors don’t know whether Kennedy will act in favor of the companies he’s tasked with regulating, and it’s unclear how much authority he actually has, Cramer said.
AbbVie and Johnson & Johnson are solid pharma names, he said. But with the bond market heading higher, investors may not want to tolerate the risk of those stocks, Cramer suggested. Wall Street may also be wary of Johnson & Johnson because it is still plagued by ongoing litigation, he added. Procter & Gamble and Colgate are two profitable consumer packaged goods companies that should usually be bought when shares are down, Cramer said. However, for some, the yields may simply not be high enough compared to the bond market to justify the risk, he continued.
Cramer also lauded the businesses of food stocks PepsiCo and General Mills, praising the former’s popular snack brands and the latter’s ubiquitous cereals. But both could take a hit if Kennedy seeks to limit common ingredients in junk foods, like artificial coloring, he said. For example, Cramer wondered if children would want to eat General Mills’ Lucky Charms cereal without the iconic colorful marshmallows.
“I am tempted to buy General Mills,” he said. “But I do fear Bobby Kennedy junior more than I care about how much I might make with this stock.”
