Cramer's 'Mad Money' Recap: Don't Blame Ben
NEW YORK (TheStreet) -- Ben Bernanke can only do so much, Jim Cramer told his "Mad Money" viewers Wednesday after the market's mixed reaction to the Federal Reserve chairman's latest remarks.
But while the market may be selling off on the news after running up ahead of that news, Cramer said the Fed chair's comments do have a silver lining.
Cramer likened the U.S. economy to a good old-fashioned BBQ. He said the coals are getting warm but the wind keeps of Europe keep blowing them out. Bernanke only has one weapon, low interest rates, the equivalent of lighter fluid, to help light them up again, noted Cramer.
So while many were hoping to see Bernanke throw high-octane gasoline on the grill, Cramer said the Fed's measured approach of keeping interest rates near zero does have some advantages. He said high-yielding dividend stocks are always in competition with Treasuries, which often offer similar yield with no risk. But with interest rates expected to remain near zero for at least the next few years, that leaves dividend stocks as the only game in town.
That's why when Procter & Gamble(PG) pre-announced to the downside, the stock only responded slightly, said Cramer, because the stock was protected by P&G's 3.7% dividend yield. The same applies to Walgreens(WAG) , a stock that got hammered Wednesday on news it's buying into a drugstore chain in Britain but seems to find a floor as shares yielded 3.8%.
The Fed may only be able to stimulate the economy so much, Cramer concluded, but thanks to low interest rates, dividend stocks will remain the best place to get yield for years to come.
Trimming Tech Positions
It's time to take profits in technology stocks and trim your positions, Cramer told viewers. That is, in tech stocks other than Apple(AAPL) , a stock which Cramer owns for his charitable trust, Action Alerts PLUS.
Cramer said while the interim news for stocks like Oracle(ORCL) and Microsoft(MSFT) may be good, the prospects for these names going into the second half of the year are dicey. That's why it's better to lock in profits now ahead of any perceived or actual weakness.