CNBC’s Jim Cramer said Friday that hedge fund billionaire David Tepper has a more positive view on the stock market, with coronavirus vaccines getting rolled out across the U.S. and the Federal Reserve staying accommodative.
The “Mad Money” host said investors should take note of Tepper’s outlook, given that the Appaloosa Management founder sent Wall Street an early warning shot last February about the risks the coronavirus presented financial markets.
“I don’t want to say he’s wildly bullish. I would say he’s very constructive,” Cramer said on “Squawk on the Street.” “He saw this coming. He knew to get out, and now he feels there are pockets where you should be in, pockets of very reasonable valuations.”
Cramer did not specify which “pockets” Tepper was talking about.
“I think it’s important to recognize that a guy who knew [the market] was going to go lower because of the virus is now taking a more positive stance,” added Cramer, who said he spoke with Tepper on Friday.
Tepper, who also owns the NFL’s Carolina Panthers, pointed to the Fed’s massive monetary stimulus and near-zero interest rates as key reasons why investors should be in equities, Cramer said.
“As David Tepper told me, as long as you have the Fed being easy and this liquidity sloshes around, it’s very hard to bet against this market,” Cramer added.
Tepper has used the Fed for guidance before, most notably in 2010 in the wake of the financial crisis. The billionaire investor’s comments on “Squawk Box” at the time set in motion the so-called “Tepper rally.”
Tepper’s warning on the coronavirus last year proved to be remarkably prescient. On Feb. 1, a little more than two weeks before stocks started to tank in earnest on Covid fears, Tepper told Cramer he had become cautious on the market due to the virus. “You have to be careful,because it may be a game changer. So you’ve just got to be cautious,” Tepper said then.
Stocks would later enter a multiweek plunge, with the S&P 500 recording its fastest ever sell-off, more than 30%. However, since its pandemic-era low on March 23, the benchmark U.S. equity index has soared about 70% as of Thursday’s close.
Vaccine rollout
Wall Street is now closely watching the rollout of vaccines across the U.S. because of the implications for the resumption of economic activity. So far, it’s gotten off to a shaky start.
Cramer expressed optimism that the pace of vaccinations would improve soon. He pointed to efforts to create mass inoculation sites at sports stadiums, including the home of Tepper’s Panthers — Bank of America Stadium in Charlotte, North Carolina.
“My money is on Tepper” and other corporate leaders who are pitching in on administration efforts, said Cramer, who received his first dose of the Covid vaccine earlier this week.
Cramer said the stock market will soar even higher once vaccinations are widely distributed enough. “Look out. I think we’re going to be on the cusp of a boom when we get immunized.”
