- CNBC's Jim Cramer advised investors to wait for a better entry point into stocks because Wall Street is too optimistic in the face of rising coronavirus cases and hospitalizations.
- "I think there's too many people who are positive. I think you let it come in a little," Cramer said Thursday.
- The "Mad Money" host said that some companies may have had their hopes dashed of a smooth economic recovery.
CNBC's Jim Cramer said Thursday he believes some on Wall Street have become too optimistic about the market in the face of surging coronavirus cases and hospitalizations, suggesting investors will find better entry points into stocks.
"I think there's too many people who are positive. I think you let it come in a little," Cramer said on "Squawk Box."
The Dow Jones Industrial Average and S&P 500 fell Thursday morning, while the tech-heavy Nasdaq Composite was narrowly higher. Stocks that would benefit from a retrenchment in the pandemic, such as airlines and cruise operators, were trading lower. Earlier in the week, they rallied on the back of positive vaccine news from Pfizer and its German partner BioNTech.
On Wednesday, the Dow closed slightly lower after soaring nearly 1,100 points in a two-session rally on Covid-19 vaccine optimism, which added to last week's almost 7% gain. The Nasdaq jumped 2% on Wednesday, breaking a sharp two-session losing streak, which was fueled by the pummeling of stay-at-home tech stocks.
Cramer said he believes investors need to recalibrate their outlook toward the coronavirus. "Shouldn't we just be thinking about what happens when all these businesses close?" he said, referencing the possibility for tighter public-health restrictions designed to reduce transmission. Some states are already starting to reimpose targeted measures.
The "Mad Money" host acknowledged there was some momentum in the market, with some airlines saying they were seeing increased demand for flights. However, he said he's observing signs that, perhaps, the momentum is waning, namely Disney's stock declining ahead of its after-the-bell earnings report Thursday.
"You had a Disney meeting where I thought we were going to hear good things," Cramer said later on CNBC. "I'm beginning to worry that there are companies that really had their hopes up and their hopes are dashed, but there's nothing replacing it until this amorphous May period" when a Covid-19 vaccine could be more widely available, he added.
Cramer, when critiquing what he believes is misguided positivity, pointed to remarks made earlier on CNBC by Jim Paulsen of The Leuthold Group. The firm's chief investment strategist said on "Squawk Box" he believes the worsening coronavirus situation could hit the U.S. economy, but contended that it should not spook investors too significantly.
"With the vaccine news and current earnings momentum, I don't think the market will go down very far because it's not a far window from where we are now, and where we might be in the spring, which could be a totally different Covid situation," Paulsen said.
Disclosure: Cramer's charitable trust owns shares of Disney.