The United States could open for business sooner than initially projected, but investors should not expect business to instantly return to normal, CNBC’s Jim Cramer said Wednesday.
Stocks rallied after Dr. Anthony Fauci, a key health leader in the fight against coronavirus, noted the public could witness the “beginning of a turnaround” in the pandemic as soon as next week. Yet, the need for social distancing will dictate how the recovery occurs.
“I know Dr. Fauci’s not signaling an all clear. He’s saying the lockdowns are working, which is why we need to keep up the social distancing,” Cramer, the host of “Mad Money,” said. “Even when the lockdown ends you’ve got to be prepared for a new world that looks very different from the old one and a lot more investable for the big guys and not for the little guys.”
The Dow Jones and S&P 500 both rallied about 3.4% during the session, gaining about 780 and 91 points, respectively, and the Nasdaq Composite rose 2.6%.
While the idea of post-pandemic society enticed Wall Street investors, Cramer warned that contagion fears will linger and measures to combat the virus will remain in place, affecting how and what businesses can bounce back.
“In fact, he says ‘now’s not the time to pull back at all, it’s a time to intensify,'” Cramer said. “That’s why, when we do open for business, the new normal won’t be like the old normal and you must understand that because it matters for your life and your portfolio.”
Retail and the consumer tech industries are two arenas that will need to adapt to new habits, he said.
Retailers like Walmart, Costco and Target, who have taken market share in the space, are equipped with e-commerce businesses and goods pick-up operations that are ideal in a social distancing environment, he continued. Scores of non-essential businesses were forced to close up shop due to government responses to slow the spread of the deadly disease, which put more pressure on an already challenged retail sector.
“I’m betting most of the department stores will choose this moment to permanently close their worst locations,” which means “more market share for outfits like these,” while also yielding business to Amazon, Cramer said.
“Each time we have one of these situations where you can’t go shopping, you end up buying more stuff from Amazon, and less stuff from supermarkets or drug stores.”
Furthermore, the shopping experience could adapt to the new world by allow customers to make purchases without having to stand in line. Smartphones are already helping usher in a new era of cashierless stores, such as Amazon who opened a cashierless grocery store in February and began selling cashierless technology to other retailers in March.
“We need devices with near field communications, so you can just capture the bar code on the items you want, then pay using Apple Pay and walk right out of the store. No waiting in line required.”
Technology plays a critical role in Cramer’s outlook for a new normal. It can, in his eyes, find a way to ease the public’s fears of contracting COVID-19 by simplifying and digitizing use of medical devices.
With companies like DexCoM manufacturing diabetes management systems that can connect to smartphones, it’s only a matter of time before a company like Apple creates a way for wearable technology like the Apple Watch to take an individual’s temperature, Cramer said.
That could help get the American workforce back in motion.
“That’s why I doubt we’ll ever go back to shopping like we used to. Everybody’s gonna be on edge, unless both workers and shoppers have face masks,” Cramer said. “I think everyone should have their temperature taken first thing when they go to work … and that’s going to be the new normal.
