CNBC financial analyst Jim Cramer says big-box retail chains will be the only ones to survive the coronavirus without another economic rescue package to cushion the effects of the coronavirus. He said most companies will go into default without financial help from the government or lifted stay-at-home orders.
"Without more stimulus, I think you should just buy the big chains that can survive the lockdown and a slow reopening of the economy. [They'll] thrive either way," the Mad Money host said while talking about how investors should approach the stock market these days. "I think that's terrible for the country. It's like an economic coup by big business at the expense of everyone else, but it doesn't have to be terrible for your portfolio."
He listed Walmart, Amazon, Target and Costco as retailers with balance sheets that can weather the storm. Balance sheets, which lay out a company's assets, liabilities and equity, are used by investors to determine a firm's financial health. Likewise, Cramer said large chain restaurants like Chipotle, Starbucks, Wendy's, McDonald's, Burger King, Domino's Pizza and Wingstop will be able to make it through the health crisis.
But for most companies, "it means, well, you're just trying not to default. Trying not to get evicted," he said. "Take a look around at every business you see on the streets where you live. Do you know the most of them won't make it unless the government gives us another bailout?"
The Labor Department revealed this week that roughly 3 million more Americans sought unemployment benefits last week, which brings total claims nearly 36.5 million in the past two months. States have slowly begun to reopen their economies since the pandemic is believed to have passed its worst phase, though national health leaders like Dr. Anthony Fauci have warned against reopening too quickly.
Meanwhile, lawmakers are mulling whether to pass another spending measure to support the economy, with Democrats putting pressure on Republicans to consider a fourth stimulus package. "The problem with this situation is that it's a rigged survival of the fittest," Cramer said. "If the government forces your enterprise to shut down, it should compensate you for the business you're losing."
The House is expected to vote Friday on a $3 trillion stimulus bill that would deploy measures designed to buoy small businesses and help them keep employees on payroll, such as $10 billion in emergency disaster assistance grants and a strengthened employee retention tax credit. The bill, presented by House Democrats, also includes nearly $1 trillion in relief for state and local governments, a second round of direct payments of $1,200 per person (and up to $6,000 for a household), and about $200 billion for hazard pay for essential workers.