Cramer says Monday’s action suggests some anticipate a Harris win

CNBC’s Jim Cramer reviewed Monday’s market action, saying the session’s moves reflect investors who feel Vice President Kamala Harris could win the presidency, even as the race remains deadlocked in the polls on the eve of Election Day.

“I’m not sure the market’s right about what a Harris presidency would mean for business, but at least now we have a blueprint for what Wall Street thinks it’ll mean,” he said.

Traders, Cramer said, are looking to get ahead of election results, and they’re looking for signs that someone knows something that others don’t. He suggested that some on Wall Street foresee a Harris victory because of a surprising new poll released this weekend that showed Harris ahead in Iowa, a traditionally red state that seemed like a shoo-in for former President Donald Trump, who won the state during the past two elections. The poll showed Harris leading Trump 47% to 44%, and Cramer said it has led investors to question whether other red states could turn blue.

He pointed to several sectors that pulled ahead on Monday, including home builders DR Horton, Lennar and Toll Brothers, which may have been sent higher as investors anticipated the effects of Harris’ proposed tax breaks and aid for first-time home buyers. Companies that rely heavily on imports — like alcohol seller Constellation Brands or cosmetics company E.l.f. Beauty — may have rallied at the prospect of a Harris administration because of the vice president’s more moderate trade stance compared to her opponent, who has vowed to implement dramatic trade duties across industries, Cramer said.

Meanwhile, hyperscaler stocks like Amazon and Alphabet traded lower, he added. Cramer said Wall Street could suspect that Harris will continue the Biden administration’s legacy of strong antitrust law enforcement, perhaps keeping on officials like Federal Trade Commission Chair Lina Khan, who has been tough on big business.

“I like the idea that you can now get a jump on what traders think,” he said. “Then again, I don’t regard traders as the best prognosticators of anything other than what other, slower traders might do within the next day or two — just not worth changing our portfolio over. I say stay the course.”

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Constellation Brands, Alphabet and Amazon.