Jim Cramer on Covid-19 spikes: A lot of people were 'in denial'

CNBC's Jim Cramer discusses how markets may have gotten ahead of themselves about the economy reopening during the coronavirus pandemic. “I think there’s a lot of people who were in denial. People who say, ‘Listen, that’s what happens when you start testing more or the hospitalizations, they’re not really up.’ Well, that’s not true. The hospitalizations are up,” Cramer said. Cramer said he believes the situation in these states may not get as severe as it was once was in New York state and New Jersey, but argued investors cannot ignore the developments. “I think we have to watch it,” he said. Earlier Thursday, the Labor Department reported there were 1.54 million initial jobless claims last week, a figure slightly better than what economists polled by Dow Jones had expected. It marks the 10th straight week of declining initial claims since mandated business closures due to the coronavirus pandemic wreaked havoc on the U.S. economy. The S&P 500 is up more than 40% from its virus-driven lows in late March. More recently, the rally had been driven by stocks that were particularly sensitive to the reopening of the economy. For example, American Airlines is up more than 65% in the last month. Cramer argued that retail investors who were day trading have been a driving factor in pushing these types of stocks higher. A notable portion of these people are trading on margin, meaning they’ve borrowed money from a brokerage firm to make an investment, Cramer said. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2JdMwO7 » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC #CNBC #CNBC TV