Mad Money

Cramer makes the case for consumer goods stocks amid tech-led declines

Key Points
  • "Mad Money" host Jim Cramer recommends investors stay the course through a rough market punishing some of its top stocks.
  • Cramer notes the Amazon-led declines, recommending some other, safer names for concerned homegamers.
The case for consumer goods stocks amid tech-led declines

CNBC's Jim Cramer noticed some countervailing forces in Wednesday's tape as stocks tapered their technology-led declines.

As stocks fell on news that President Donald Trump may go after e-commerce giant Amazon for its tax treatment, the "Mad Money" host turned to some historically safe sectors to see if they were withstanding the pain.

"While these formerly beloved tech stocks get hammered, you have new winners like Clorox," Cramer said.

Many investors said that the stock of Clorox, which closed up more than 3 percent on Wednesday, was the wrong stock to buy if the U.S. 10-year Treasury yield rose to 3 percent.

Clorox, a digitally-focused consumer products company that spends 50 percent of its advertising budget on online ads, has been one of Cramer's favorites in the consumer space for its innovative approach to what many see as a stale industry.

But now that the Treasury yield is just over 2.75 percent, Cramer said the tech-savvy Clorox was falling back into favor.

"With rates that are lower, people now fear a slowdown, and during a slowdown stocks like Clorox become more attractive," he said. "Investors look at it as the best of the best when they're worried about the economy."

The same goes for retail stocks, Cramer argued. After an upside earnings surprise from Lululemon fueled by e-commerce and an uptick in Kohl's thanks to its partnership with Amazon, Cramer argued that investors were ignoring the tech-related benefits of retail as they bought in.

"As I keep telling you, this is a challenging, controversial market and we're not used to it. It's not for everyone," the "Mad Money" host said, highlighting the irony of telling long-term investors to buy the struggling stock of Facebook.

"Stay the course. Maybe don't even watch the minute-to-minute action if you're too squeamish," he recommended. "In a difficult market, formerly beloved stocks tend to become targets. And while I think the worries about Facebook and Amazon and Twitter and Nvidia are being blown out of proportion at this point, I also recognize that the stocks, of course, can go lower."

"If you can't take the pain, you know what? Forget about [those stocks] and go buy some Clorox," Cramer said.

WATCH: Cramer's take on the Trump-Amazon debacle

Cramer makes the case for consumer goods stocks amid tech-led declines

Disclosure: Cramer's charitable trust owns shares of Amazon, Facebook and Nvidia.

Programming Note: For more on Nvidia, watch CEO Jensen Huang's interview on "Mad Money" Thursday at 6 p.m. ET.

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