How can the stock market hit new highs in the face of horrific inflation numbers? Jim Cramer told Mad Money viewers a simple answer Thursday night. It’s no surprise that everyone knows what’s coming and why. On the surface, 5% inflation may sound serious, but if you look closely, most of that inflation is temporary and will resolve itself over time.
The biggest cause of inflation in Thursday’s report was a 7.3% rise in used car and truck prices. But now that new car production is slowing due to a shortage of semiconductors, it makes sense for people to raise the price of used cars. If the chip foundry can meet the demand, the price will go down.
Next is the airfare. Is anyone surprised by the rising price of seats as airlines are gradually resuming operations?
The same pattern can be seen in every industry. Grain prices will rise until farmers are able to plant more crops. Demand for restaurants has skyrocketed after countless restaurants have been closed and supply chains have been disrupted. Also, in the plastics industry, the colder temperatures in Texas have allowed factories to return to normal operation. According to Cramer, sustained inflation is only seen in freight transport because it requires more payment to truck drivers.
So while some may argue that inflation is real, Kramer tells viewers that the inflation he sees is the price of shares being bid by a crowd of wall street bets who refuse to sell. Said it was in.
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Executive Decision: PerkinElmer
Singh explained that while his COVID inspection business continues to exceed the exceptions, PerkinElmer isn’t just about COVID. The company has made a dramatic shift to life sciences and now accounts for 75% of its business. Consumables and services make up the majority of the company’s recurring revenue stream, which is built each year.
PerkinElmer is also active in acquisitions, with five acquisitions in the last six months, all in the life sciences space. Singh said cell therapy and gene therapy will be key trends over the next decade.
China remains an important market for PerkinElmer, accounting for 25% of total sales. Food quality, safety, and testing have been questioned during the pandemic in China, but are now back to normal levels, Singh said.
Cramer reiterates that there are only a handful of life sciences companies worth owning, including PerkinElmer.
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https://www.thestreet.com/jim-cramer/cramers-mad-money-recap-june-10-2021 Cramer’s Mad Money Summary: Market vs. Inflation