Iraq could be a real monkey wrench in this market
As techs begin to see the much-needed return of enterprise spending, Mideast violence threatens to leave them sputtering.
The holy grail of tech versus the evil power of oil. That's what's duking it out this morning, and as long as the president doesn't shake things up further, it could actually be a push.
What's the holy grail of tech? That's when Intel (INTC) lifts sales, earnings and gross margins because of enterprise demand. Anyone who has followed Intel as long as I have knows that when you get that mid-60s gross margin and more orders than you can handle, then the leverage is monstrous and the guidance conservative, simply because they can't keep up with the momentum.
Yep, it's happening, and it is happening just in time, because the downward pressure from Iraq threatens to take out the entire consumer and transport leadership and this market is desperate for a leader.
Intel's moment is here not just because of demand pickup but because CEO Brian Krzanich cut back capital spending at the right time and because he is getting out of the extraneous businesses and focusing on growth markets. You see, Krzanich is a return to the old days at Intel, when it was run by brilliant engineers, not by sales or marketing people. He's the real deal, and this kind of older-tech leadership -- with low valuations, real profits and a potential for increased dividends -- suits the market's bulls entirely. I really like him because he gets that Intel has to think like the younger generation that worships the handheld and plays games -- he's a gamer himself -- something I wouldn't know if my daughter hadn't told me to check in with Reddit.com daily to stop being so old.
But more importantly, will it matter? It will if Brent calms down and the president devises a game plan that throttles back the terrorists, not something easily done, because the only real way this crummy, miserable government in Iraq seems to be able to tame the terrorists is with the equally terroristic thugs from Iran. The pox-on-both-your-houses scenario might be too dangerous and lead to all sorts of ramifications that renders the holy grail of tech meaningless, even as a return to enterprise spending is a godsend for so many companies in the universe.
Believe me, we would be discussing nothing but Intel if it weren't for Iraq, but that's a needless construct. It's something I tried to do with biotech back in 1990 when Iraq invaded Kuwait, thinking that the old Cephalon would withstand the pressure because its new drug prospects were so great that nobody would care about Iraq when that company had so much in the pipe. I was wrong, and the pressure coursing through the airlines to companies like Target (TGT), nee Dayton-Hudson, was far too great.
So, let's see how it plays out. But I can tell you, if the president makes any moves today or even if the Republicans attack him again for napping and West Texas Intermediate crude spikes to $110, you will be looking at Intel in the rearview mirror, except in this version, objects in the mirror are farther than they appear.
Jim Cramer's Action Alerts Plus: Check out this charitable trust portfolio for the stocks Cramer thinks could be winners.
More from TheStreet
BENGHAZI STYLE !
oooops -- wait --- she blew her top faster on NPR than Bill did in Monica's mouth.
I better watch what I say.
Let's find George Braindead Bush and Little Dick Cheney and see what they think
Since they are the two clowns responsible for the Iraq travesty
I'm still not sure what he's talking about. Does this have something to do with Restoration Hardware?
Elsewhere in the news, the World Cup soccer matches continue and GM has recalled some more cars. Yawn.
You got to hand it to those Al-Qaida terrorists. They have accomplished in just a few months and for a lot less dough, more than our vaulted (so-called), "the most powerful military on the face of the planet" could NOT over a period of 13-years, and Allah knows how many trillions of dollars, and at the expense of destroying a whole economy. Bravo, Al-Qaida.
There should be a Nobel Prize in there somewhere for Al-Qaida and these Sunni Insurgents. Bravo. There should be another one for a country that never learns from its mistakes.
Meanwhile, my worthless piece of crap government and military industrial joke comes up a big fast loser, again. Looking at Bagdad can you say Saigon? Looking at IRAQ can you say South Vietnam? Can you say "never again" or "this time is different"? Ha. Ha. Ha.
This country and this military couldn't fight its way out of a paper bag for anything under $1-Quadrillion dollars of worthless US Dollars. I am a war-weary American, and this is a disgrace. Putin must be laughing his a** off.
Copyright © 2014 Microsoft. All rights reserved.
As geopolitical tensions threaten to spin out of control, investors are wondering how best to position their portfolios for the global turmoil.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.