Jim Cramer lists five market sectors that are working and five that are not

CNBC’s Jim Cramer on Wednesday picked out five sectors that he thinks are performing well in the current economic environment, and he gave five he thinks are lagging behind.

“Things can always change, but for the moment, I expect the winners to keep winning and the losers to keep losing,” Cramer said.

Here are Cramer’s five winners:

1. Cybersecurity: Cyber threats have never been more dangerous, Cramer said, and companies in this sector are seeing a lot of business. He highlighted CrowdStrike and Palo Alto Networks as particularly solid names, adding that both are winning major deals. Even though their stocks have been volatile around earnings, he continued, they are likely heading higher in the long term. He also said peer Zscaler is performing very well.
2. Cryptocurrency: Stocks linked to cryptocurrency are seeing gains, Cramer said, mentioning Coinbase, Robinhood and Circle Internet. There are also many other smaller companies trading often that emulate these three, he continued.
3. Data center: According to Cramer, stocks related to the data center have “gone bonkers,” with many centered around artificial intelligence powerhouse Nvidia — which hit a record high on Wednesday. He highlighted Advanced Micro Devices, Cisco, Arm, Marvell Technology, Vertiv, CoreWeave, Broadcom and Vertiv. Cramer also named infrastructure suppliers Dover and Eaton, as well as power companies set to do well as energy-guzzling data centers proliferate, including Vistra, Constellation Energy and GE Vernova.
4. Semiconductors: There is a lot of overlap between data center-related stocks and semiconductor outfits, Cramer said, naming Nvidia in particular. But other semiconductor companies work here, he continued, like Texas Instruments, NXP Semiconductors, Applied Materials, KLA, Lam Research and Micron.
5. Banks: Cramer said it has been a while since the banking sector was a market leader. These stocks tend to do well when unemployment is low, he added. Friday after close brings results from the Federal Reserve’s annual stress tests for banks, and Cramer said he thinks they could be a positive catalyst for the group. He said his favorite of the group is Capital One.

Here are Cramer’s five losers:

1. Housing: Cramer said there has been “anemic new housing starts,” and “terrible mortgage numbers.” Homebuilders haven’t been putting up good results, he continued, and some of the big builders are cutting their prices because their inventories are going up. He said investors can’t touch the group until the Federal Reserve starts cutting rates, saying Toll Brothers, Lennar and KB Home are weak.
2. Autos: Autos are plagued by tariff instability and the ongoing trade war, Cramer said. The companies need parts from around the world, he continued, including rare earth minerals from China. But the supply of those materials is in jeopardy as tensions between the country and the U.S. continue.
3. Freight transportation: Truck companies can’t seem to meet expectations, and railroad stocks aren’t gaining momentum, Cramer said. There might be opportunity in FedEx, he said, who missed guidance estimates when it reported Tuesday night but has cut costs substantially and guided for more. However, since much of FedEx’s business involves exports and imports, it may not take off until there is more certainty on the tariff front, Cramer indicated.
4. Retail: For the most part, Cramer suggested, retail stocks are troubled. He named Kohl’s, Macy’s, Ollie’s, Burlington, Ross, TJX and Target.
5. Consumer packaged goods: According to Cramer, many stocks in the consumer packaged goods sectors are having trouble — including General Mills, which put up weak numbers on Wednesday, citing macroeconomic uncertainty. Cramer said stocks like Colgate and Procter & Gamble are usually strong, but can’t gain much traction right now. Alcohol name Constellation Brands and snack maker J.M. Smucker are hurt by the popularity of GLP-1 weight loss drugs, Cramer continued.

“Now you know the five ins and the five outs of what’s working in this market,” he said. “Whenever we have downdrafts — even intraday downdrafts — remember what’s been working and what hasn’t.”

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Disclaimer The CNBC Investing Club holds shares of CrowdStrike, Palo Alto Networks. Broadcom, GE Vernova, TJX and Nvidia.