Stock Market Today With Jim Cramer: FAANG Reinvention, Keeping Powder Dry

The FAANG stocks reinvent themselves, which is why Jim Cramer is still bullish on the group.

Stocks on Friday dropped for a fourth day after St. Louis Federal Reserve Bank President James Bullard said the central bank has started talks to introduce the idea of trimming the pace of its $120 billion in monthly bond purchases.

Bullard told CNBC the Fed has begun discussing pulling back on bond purchases, support that has helped push stock markets to records. Bullard also said Friday he sees an interest rate increase in 2022 as prices have risen faster than expected. 

FAANG Firms Reinvent Themselves, Cramer Says

The FAANG stocks reinvent themselves, and as inflation fears abate, those stocks are making a comeback, Jim Cramer and Action Alerts PLUS senior portfolio analyst Jeff Marks said Friday. 

“If they were a static company the way, say, IBM  (IBM) – Get Report was, then it would be a silly acronym,” Cramer said. But the FAANG stocks are evolving, Cramer said. Alphabet  (GOOGL) – Get Report “sounds like they’re going to spin off” autonomous-driving division Waymo, and Google and Apple  (AAPL) – Get Report both are moving into healthcare.

Cramer said that the FAANG group — Facebook  (FB) – Get Report, Amazon  (AMZN) – Get Report and Netflix  (NFLX) – Get Report are also members — is “alive and dynamic.” At the same time he also said he expected their prices to pull back, giving investors a “better chance” at buying shares. 

Action Alerts PLUS Has Cash to Weather a Decline

Jim Cramer’s Action Alerts PLUS is prepared for a market dip thanks to its deep cash position, TheStreet’s Jim Cramer said Friday. 

“The cash position we have was meant for this decline. So when the decline happens, we don’t just run away … nor do we have to buy on the first day of the decline,” Cramer said from the floor of the New York Stock Exchange on Friday. 

Stocks finished mixed on Thursday with high-growth tech shares posting solid gains after the Fed indicated it likely will raise rates two times by the end of 2023.