After a rapid rise in 10-year Treasury yields and the likelihood that the Federal Reserve will soon begin to taper its bond buying, CNBC's Jim Cramer is cautioning about a group of stocks that could kill your portfolio.
"This was a spike that frankly took my breath away, and that's one of the reasons that markets reversed intraday," he said Wednesday. "If you don't talk about fixed income, you don't understand why some stocks—particularly utilities—have turned into death traps."
When asked about dividend-paying stocks, such as AT&T, Cramer said, "They're going down."
Instead, he suggested companies that are growing top-line revenues, especially those involved in the global recovery, such as 3M. "It has the potential to take part in a worldwide resumption of growth."
"What had to happen is we had to see the economy get better so banks could do better. So they could loan, so their margins can expand," he said. "This is a market that needs to get off of Fed life support. So many people think that getting off life support means 'do not resuscitate.' I say it means that some stocks are good."
Cramer pointed to Apple long-term bonds' dropping in this environment. "Billions are in those kinds of paper. Billions are wrong. And that is who's going to get hurt," he said.
"If you get strong data tomorrow on employment claims and if you continue to see housing rise and you see retail sales do better, then this is a new plateau," he said. "I think consumer confidence and housing and the stock market has created a wealth effect. This is a better situation than what it used to be that can translate into a better second half of 2 to 2.5 percent growth."
Relatively high strength in Europe and extreme monetary policy in Japan are helping markets, despite weakness in China, Cramer said.
"What I'm presenting is a consumer confidence, 401(k) boost. People feel better. This creates a better environment, not an environment that should worry the Fed," he said. "Tax receipts are up, whole states that I was worried about I'm not worried about anymore. California, holy cow!"