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.

By Jim Cramer Jun 13, 2014 12:08PM

Baghdad, Iraq oil refinery on the outskirts of the city © Sovfoto/UIG via Getty ImagesThe 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. The Street on MSN Money


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.


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87Comments
Jun 13, 2014 12:47PM
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wall street is the monkey wrench to the economic well being of the middle class working poor that gets poorer.  you can't stop it.
Jun 13, 2014 3:01PM
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What are all the American contractor's doing over there? Didn't we leave a huge new (American tax payer) embassy in Afganistan to rot also? Spend our money here at home.
Jun 13, 2014 12:43PM
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Which is it Jimmy, the Cloud is the next Big Thing or Intel will be selling it's latest and greatest. I don't believe you can have extended periods of both. So Big Oil will use the latest Iraq issues to gouge us even more. What a Shocker.
Jun 13, 2014 2:57PM
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The "monkey" wrench is in the whitehouse. ☻
Jun 13, 2014 3:02PM
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I guess we will just have to vote for Hillary "Brain Damage" Clinton to clean it all up.
BENGHAZI STYLE !

oooops -- wait --- she blew her top faster on NPR than Bill did in Monica's mouth.
I better watch what I say.

Jun 13, 2014 2:39PM
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A fool and his money are soon part of the stock market.
Jun 13, 2014 2:59PM
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I bet there are plenty that will make money on the market on the way down too.
Jun 13, 2014 1:55PM
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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

 

 

Jun 13, 2014 1:23PM
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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.

 

 

Jun 13, 2014 12:43PM
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Yep Jimmie it's probably one of the only thing the media can't play CYA for their man. It's coming down and obama sits on his a -- doing very little.
Jun 13, 2014 2:31PM
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This is not IRAQ throwing a monkey wrench in....It is the MONKIES on Wall Street SPECULATION Avenue doing this to our own country for the wealth of the 1%.  It is so sickenly fixed and no one even believes the market reports anymore.  You dont have to be big educated just  a normal true AMERICAN to see all the lies and crap that goes on.  Please its like sayin someone forced Boner to take a drink.....Riiiiiiight!  Some republicans really are the TRADERS not our soldiers.
Jun 13, 2014 6:07PM
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I think our first black and white president is in a bind. What do I do? The advisors and his party are starting to figure it out. Folk's these people will do whatever to save their own despicable asses and I promise you that. You think there in touch with us ? You are so wrong  and go to the polls and vote every one of those a-holes out. Democrats and republicans a like, We need to quit giving these people power and when we get the right ones in there we will make our changes. They will not retire with there salary after four years of service for a start.
Jun 13, 2014 2:33PM
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and all u rebublican brain washed, carl rove, koch brother pundits....Dont forget BUSHES and CHENEY/HALIBURTON screwed up Iraq not PRESIDENT OBAMA !!
Jun 13, 2014 1:28PM
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No, Bobo just got himself a new wrench....I didn't think, they let clowns have tools...? 
Jun 13, 2014 12:40PM
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What? The real world is interfering with the Dow's march relentless march to infinity? Say it ain't so Jim!
Jun 13, 2014 4:35PM
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FOR THE MARKET ?       R O T F L M A O 

HOW ABOUT THE SET UP STAGES FOR  W W 3.


Jun 13, 2014 3:12PM
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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.

Jun 13, 2014 4:07PM
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We poured how many hundreds of billions in that rat whole waiting for the obama flush?
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