CNBC’s Jim Cramer said Thursday that the stock market has still not priced in the economic recovery that will come after the spread of Covid vaccines.
“The market didn’t price it in. Not at all … I think human animal spirits will override even what we see on the stock market,” Cramer said in Squawk on the Street.
The latest leg of the notable rally in the US stock market following the Covid-triggered sell-off was driven in part by positive news on the vaccine front. Federal regulators approved Moderna and Pfizer drugs late last year, and Johnson & Johnson’s single vaccine showed promise in early studies. The results of the third phase are expected later this month.
The S&P 500 is up more than 8% since Pfizer announced its preliminary third phase results on Nov. 9. Shares rose despite the turmoil in Washington and the slowing economic recovery.
Cramer commented on an interview on Squawk Box with BlackRock CEO Larry Fink, who predicted an economic upturn in the second half of 2021.
“If we’ve heard immunity through vaccination, we’ll see the industries that are still struggling, the industries around the gathering and gathering of people … then you’ll start seeing – for sure in the fourth quarter, or maybe by third quarter – a really long economic rally, “said Fink.
While Cramer cautioned that spending more on travel and other activities could take some money off of the stock market, he said another round of incentives could see retail investors keep buying stocks while increasing their spending.