Are stocks too optimistic? This rally is 'justifiable,' says Jim Cramer
(Kitco News) Stocks are getting a glimpse of a post-COVID world with the news that Pfizer and BioNTech COVID-19 vaccine is 90% effective. CNBC's Jim Cramer described the record rally in stocks as "justifiable."
The Dow hit a new record as it surged 1,317 points higher, or 4.7% Monday morning. The S&P 500 also saw new record highs, rising 3.5%. The Nasdaq Composite was up 1.3% higher. The Russell 2000 index advanced 5.8%.
"The rally is justifiable. [The vaccine news] starts a new discussion — what is America going to look like post-COVID," Cramer told CNBC. "We came in thinking that the disease is out of control. There were some states that felt that they lost any ability to contain it. People were talking about a national lockdown under the new president. This may end it."
After news of Joe Biden's presidency broke over the weekend, attention shifted to a surge of new coronavirus cases across the U.S, which is reporting a new total of over 9.9 million cases, according to Johns Hopkins University data. On Sunday alone, the U.S. also saw 100,762 new cases and 453 new deaths. This marked the fifth-highest day since the pandemic began in March.
"The country … [is] really being cut down by this. Now, this is a real opportunity. This is not some companies that never brought anything to market. This is one of the greatest companies in the world. I want to point out that the cynicism about science was unrelenting," Cramer said. "There's a belief among some people that science was never going to be able to tackle this. That's wrong, too."
Earlier on Monday, Pfizer Inc said that its experimental COVID-19 vaccine was more than 90% effective.
"Today is a great day for science and humanity," Albert Bourla, Pfizer's chairman and chief executive, said. "We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity, and economies struggling to reopen."
The vaccine news allows markets to look past this crisis and start to price in a post-COVID world.
"This is a reason for genuine optimism; why don't we just celebrate it?" Cramer added. "There's a lot of people who felt growth was going to drop dramatically, and I think that's going to be off the table, and people will have to radically revise their estimates up from next year."
Last week, Cramer also commented on gold, saying that if the precious metal can hold mid-$1,800s, it has a chance to take out $2,153 an ounce.
"I want that money; I hope you do too," Cramer said.