Cramer says it's time to rotate into these long-forgotten industrials and out of high-multiple tech

Published Thu, Mar 4 202110:12 AM ESTUpdated Thu, Mar 4 202112:40 PM EST

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

(This story is for CNBC Pro subscribers only.) CNBC's Jim Cramer said Thursday that investors should look to industrial companies like Boeing as bond yields rise and high-multiple tech stocks suffer. The 10-year Treasury yield was around 1.53% Thursday afternoon, having risen steadily in recent weeks after being below 1% at times in January. Last week, the 10-year yield got as high as 1.6% in a move some observers labeled a "flash" spike. "You can't have a rally in these high-multiple stocks unless you reverse some of the 50 basis points increase that we've had in the Treasurys since the year started," Cramer said on "Squawk Box." "I don't think you even have to look at the stocks. All you've got to do is look at the bond." The rise in bond yields — which move inversely to prices — is seen as worrisome for growth stocks because low borrowing costs have been helpful in fueling their business expansion. It has put stocks like Tesla and Okta "up against the wall," Cramer said. "These high-multiple stocks that did really well during the pandemic don't really have underpinnings," Cramer said later on CNBC. "Even though they're doing well, you'd much rather buy Boeing." Another factor in favor of industrial companies is the pace of Covid vaccinations in the U.S., according to Cramer. The Food and Drug Administration recently authorized Johnson & Johnson 's single-dose vaccine for emergency use, joining Pfizer and Moderna . President Joe Biden said earlier this week the U.S. expects to have enough doses for every American adult by the end of May , ratcheting up optimism around a robust economic recovery from the pandemic. "You're talking about hundreds of millions of vaccines, so you really do have to switch direction. It's painful to have to switch direction and go buy Cummins engines up here," Cramer said, while referencing an unspecified analyst upgrade of the company. Jefferies on Thursday upgraded Cummins to buy from hold. Other stocks "that people have long forgot" are Emerson Electric , Ingersoll Rand and Parker Hannifin , Cramer said. To be sure, Cramer said on Twitter he does not believe all technology companies should be considered expensive given the bond market moves. Disclaimer Disclosure: Cramer's charitable trust owns shares of Boeing.

Jim Cramer

Scott Mlyn | CNBC

(This story is for CNBC Pro subscribers only.)

CNBC's Jim Cramer said Thursday that investors should look to industrial companies like Boeing as bond yields rise and high-multiple tech stocks suffer.

The 10-year Treasury yield was around 1.53% Thursday afternoon, having risen steadily in recent weeks after being below 1% at times in January. Last week, the 10-year yield got as high as 1.6% in a move some observers labeled a "flash" spike.

"You can't have a rally in these high-multiple stocks unless you reverse some of the 50 basis points increase that we've had in the Treasurys since the year started," Cramer said on "Squawk Box." "I don't think you even have to look at the stocks. All you've got to do is look at the bond."