Mergers and acquisitions could be a potential market savior

CNBC’s Jim Cramer reflected Monday on how the market might expand in the new year, saying fewer restrictions on mergers and acquisitions from the Federal Trade Commission could help spread wealth across the board. beyond high-performance technology stocks.

“Mergers and acquisitions could potentially save a large part of this market, from medical devices to industrial products, retailers, aerospace, utilities, food and drugs and many other groups,” did he declare. “But right now the FTC is really working to block everything, trying to block any deal that comes their way, sometimes just to hold them before a judge lets them through, and sometimes successfully, by cutting them down.”

Cramer acknowledged that it’s been a tough year for stocks other than the “Magnificent Seven,” whose success has eclipsed most other sectors. The seven Nasdaq stocks are Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia And You’re here. He added that he wasn’t sure if that dynamic could change in the new year, adding that either the “Magnificent Seven” needed to “stop doing so many good things” or the others needed to “stop doing so many bad things.”“.

Cramer said the possible solution for the rest of the market is not necessarily challenging the Magnificent Seven, but changing the winning percentage of other companies. Cramer instead suggested that mergers could lead to significant gains in a variety of different sectors.

According to Cramer, pharmaceutical companies could get better and more profitable products if they merged with or acquired biotechnology companies. Food companies need to merge to reduce costs, he added, saying such deals will not result in higher prices for the consumer. Cramer also said bank mergers could generate gains for both target and acquirer, saying there are currently too many banks to regulate well.

“If you want to see the rest of the market go up, President [Joe] Biden just needs to replace his FTC chair Lina Khan,” Cramer said. “But given his pro-worker stance and the fact that mergers often lead to layoffs, I doubt he’ll go there. Then again, no one lasts in these jobs forever, so you never know. »

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Disclaimer The CNBC Investing Club Charitable Trust owns shares of Amazon, Apple, Microsoft, Alphabet, Meta and Nvidia.