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Cramer Sees Market Gaining Confidence in Vaccines to End U.S. Covid Crisis in the Second Quarter

Scott Mlyn | CNBC
  • Vaccine optimism has Wall Street believing the worst of the coronavirus pandemic in the U.S. could by over in the second quarter of 2021, CNBC's Jim Cramer said.
  • "The market is very prescient," he said.
  • "You've got to go buy the airline stocks. Now we know why the cruise lines are going up," he said.

CNBC's Jim Cramer said Tuesday that Wall Street is gaining confidence in the potential rollout of a coronavirus vaccine in the U.S., suggesting investors believe the serious challenges caused by the pandemic could soon be behind the country.

"The market is very prescient. I think the market has been going up because we're starting to realize this may be — for all intents and purposes in America, not in the rest of the world — over in the second quarter of 2021," Cramer said on "Squawk on the Street."

The stock market had a very strong November, despite uncertainty caused by President Donald Trump's challenges to the election and a worsening Covid-19 outbreak, as a slew of positive vaccine developments were announced. Stocks continued to show strength in the initial days of December trading, with the Dow Jones Industrial Average, S&P 500 and Nasdaq closing Friday's session at a record high.

The Dow and S&P 500 fell Monday, while the Nasdaq advanced 0.5% and closed at another record high. Stocks opened modestly lower Tuesday.

The head of the Trump administration's vaccine development effort, Dr.  Moncef Slaoui, has said he believes the entire U.S. population could be inoculated by June. He predicted the country "should have this pandemic under control in the second half of 2021" if enough Americans receive the vaccine.

Cramer's comments Tuesday come shortly after the Food and Drug Administration released documents stating it believes trial data for the Covid-19 vaccine developed by Pfizer and German partner BioNTech is consistent with criteria to be approved for emergency use authorization. The regulatory agency, meeting on the application Thursday, is expected to decide within days whether it will authorize the vaccine.

Massachusetts-based biotech firm Moderna also has applied for emergency use with the FDA, and the agency is set to meet on that one next week. Another company working on a vaccine, Johnson & Johnson, said Tuesday it expects to have late-stage trial results by January, which is earlier than it had expected.

Cramer said he believes that adding J&J's vaccine to the mix would significantly increase the number of Americans who can be vaccinated. That, in turn, would accelerate the economic recovery timeline and make sectors that have been particularly hard hit by the pandemic such as travel more attractive for investors, he said. The "Mad Money" host said Tuesday he was recruited for J&J's trial recently but he's not participating.

"You've got to go buy the airline stocks. Now we know why the cruise lines are going up. You can go back to the American Expresses of the world," Cramer said. "You could say..., 'A lot of these have already moved,' but you know what, there are plenty of people who did not expect this all to come together so quickly. The vaccine glut is the story of 2021."

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