Jim Cramer names 4 stocks that can endure the Fed’s ‘aggressive tightening cycle’

CNBC’s Jim Cramer on Wednesday named four stocks that he believes can keep investors steady through market turmoil.

“As someone who thinks it’s a good idea to stay in the market, I’m urging you to consider companies that fit the funnel … while avoiding almost anything else,” he said.

“It’s not that tough a prescription, but it’s the one that works while we work our way through the [Federal Reserve]’s aggressive tightening cycle,” he added.

The Fed said it plans to institute a series of interest rate hikes this year and tighten its balance sheet to offset soaring inflation.

The “Mad Money” host’s comments come after the Dow Jones Industrial Average on Wednesday increased 0.7% while the S&P 500 was mostly flat at 4,459.45. The Nasdaq Composite decreased 1.2%.

Cramer also repeated his mantra that investors must stick to companies that make profits, return value to shareholders and have stock with reasonable valuations.

Here are his four picks of companies that meet his expectations:

Disney

“Unlike Netflix and its one-hit wonders, Disney has a massive, lucrative theme park complex, along with a stable of iconic franchises. … Disney should not be tarred with the same broad brush as Netflix,” Cramer said, referring to Netflix’s dismal latest quarterly results.

Procter & Gamble

“Because Procter has some of the finest brands in the world, it was able to pass on those price increases at will. Procter is the classic stock for this moment: It makes things at a profit while being one of the great returners of capital,” Cramer said.

Johnson & Johnson

“What is JNJ? How about the blue chip with the best balance sheet in America that has an amazing dividend and buyback,” Cramer said.

Morgan Stanley

“Morgan Stanley is the bank that arguably performed the best, as well as maybe Bank of America,” Cramer said.

Disclosure: Cramer’s Charitable Trust owns shares of Disney, Procter & Gamble and Morgan Stanley.

Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.

Disclaimer