Repositioning may not be necessary on Syria news
Sorry to be so prosaic about this, but as long oil's not shooting through the roof, investors need to take very little action.
Weird, but it sure would make sense to see oil moving up here on the Syria news. If you get geopolitical strife that involves oil-related countries, there has to be a reason the oil futures aren't going through the roof, and why only gold is running up.
Perhaps it means it's just not as big a deal as the stock futures indicate. Errant military action in a region known for errant military action could hurt the industrials, which have been faring better of late with better Europe and China news. The conflict in Syria will be viewed as one more event that slows growth. But it certainly is not going to bring down Bristol-Myers (BMY), the putative everyman non-cyclical name. That's why today would seem to be a buy day, not a sell day -- because the oil futures aren't ramping. In fact, I might even want to sell gold, which has rallied for a while and is enjoying its seasonal breakout.
Still, if it is for real -- meaning it will eventually spike oil -- then this is a Chevron (CVX)-Schlumberger (SLB) deal. Or, if you want to get all domestic about it, it's a day for Anadarko (APC), EOG Resources (EOG) and Halliburton (HAL), with the latter acting so well that you'll have to think that something's going on.
But let's play it out. Let's say the U.S. sends cruise missiles in to kill Syrian President Bashar al-Assad. They fail because Assad didn't just fall off a turnip truck. Then Russia warns the U.S., and the U.S. says this could lead to a global conflict. Then gold spikes some more, and then we get some sort of resolution, bloody or not -- and then gold comes down, and the advance continues after a 5% drop. That's unless, of course, we get a flight to safety toward U.S. Treasury bonds, and then it is just a 2%-to-3% drop and then some end-of-the-month markup.
Perhaps if it doesn't resolve itself by then, we'll get some Friday selling, prepping for a long weekend -- and then we are just playing for the employment number at the end of the week.
I guess I just, once again, default to a Bristol-Myers scenario, except this time Bristol looks real good cause it's down.
Also, I think it might be tempting to take some AGCO (AGCO) or Deere (DE) or Monsanto (MON) on any overall market weakness. Those stocks have come down too much vs. the commodity prices that seem to be trying to rally.
If you think there's going to be something more to it, allocate some money to S&P 500 ($INX) puts. Take down some insurance. But I just don't think you need to reposition your portfolio on this. That's something I might be tempted to suggest if oil were running to $110 per barrel, because that would mean that gasoline would take out its highs.
Sorry to be so prosaic but, in the end, the market is nothing if not prosaic when it comes to geopolitical strife. This time should be no different.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
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Syria may or may not be much of an issue but the cost sure will be. Guns or butter? The rich want guns the poor want butter. How many Americans at this point even give a hoot about the issues in that region. If the present administration was so worried why did they destabilize the entire region to begin with? Seems the disconnect with the politicos and citizens is becoming wider and wider. I think we all know the obvious. This as well as nearly every administration seem to start a war to take the place of problems on the home front. We need to take care of our own and get back to being the shining light which gives others hope throughout the world. JMHO
i am not so sure that this is just another flash in the pan situation Mr. Cramer. it would appear to me that we are looking at a tremendous flash point that could ignite at any moment. you have taken a broad stroke approach to a situation that has Russia, China, Iran, Syria, Hezbollah, Shiite and Alawites on one side and the EU, UK, USA and Israel on the other.
Syria and Iran said they would attack Israel if we the USA hit them in any manner. what do you think Israel's reaction to that will be? what will happen if that escalates and we have a protection treaty with Israel which becomes in effect...what will that mean? Certainly Germany will be protecting Israel if you read anything about what their leadership has been saying......what if Russia decides they will militarily get involved...they have put in and maintain a large vested interest in Syria.
This is anything but a simple quagmire this is a giant problem that could ignite into a massive war...there are no easy answers as the last 3 years have shown..
War. What is it good for? Absolutely nothing EXCEPT government contracts, suppression of the Debt Ceiling issue, bypass of Congress and a phony propaganda machine that makes the rich richer and a bunch of suppressed compressed recession depression young adults... dead. The only war we should be engaging in tears down glass ceilings, Internet control and manipulation and the Federal Reserve's steerage through banks that cannot stand on their own ORGANIC profits to survive.
I hereby vote that Jim Cramer go first and take ex-Republican Regal Man whoever the shill is... with him. If it's NO BIG DEAL... BE THERE FIRST.
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