A silver lining in an ugly market
Europe is still the big problem, but plunging commodities prices will help lots of companies.
It's tough to be bullish when Europe is the albatross around our necks. Who knows what will happen overnight? Somehow, it tends not to be good. And they are in huge bear markets over there.
But I can't resist talking about a silver lining that no one seems to care about. A little less than three months ago, we heard company after company talk about skyrocketing raw costs. We heard about how oil keeps going higher or is stubbornly high. We heard that paper board wasn't going down, that plastics aren't coming in and that grains are just way too elevated. Steel costs were too much for car companies, and copper was too much for homebuilders.
Companies as diverse as Ford (F) and Clorox (CLX) and Procter & Gamble (PG) and Kimberly-Clark (KMB) continually sounded alarms about inflation. Their conference calls were filled with downbeat input cost caveats that were going to hurt earnings, going to hurt costs for a very long time to come.
Meanwhile, the restaurateurs and retailers talked about how much prices at the pump were killing their traffic. The airlines were decimated by fuel costs.
Then suddenly, in this quarter, all of these commodities collapsed. All of them. Just obliterated. All of those worries and woes about so many input costs have diminished, some in radical fashion. And the declines are happening at the perfect time, right before the quarters are reported.
Sure, there's plenty of worry about demand, but the raw costs are just plain better and the companies will point that out for certain. It could change the tone, a tone that hurt us after the last quarter.
What does this mean? You can have more confidence in the transportation stocks, such an important group. You may not hear such negativity about the upcoming holiday season. You can own the food companies with good dividends because they can beat the numbers. And you are able to pick at decimated retailer and restaurant stocks precisely because of the decline in the cost of gasoline.
Look, I am not backing away from my view that Europe is the cause of the big turmoil here. We get a resolution in Europe, and we are going higher from wherever it occurs. So it is important to know what will be in good shape for earnings if we get one soon.
Think of the inputs and you will be able to make some good money come reporting season if Europe ever recedes from the front pages.
At the time of publication, Cramer had no positions in any of the securities mentioned.
Just who is it that cuts into a turd looking for a silver lining?
The finacial world is the only place where "the best and the brightest" of employees get yearly bonuses that equal 5 average Americans lifetime earnings to completely destroy the entire planets financial environment , (YES, that is right, they are STILL called irreplacable even when destroying the only industry they must work within).........and then chase that down with another bonus, while still able to maintain that they are even as smart as a cashier at Mc Donalds who would be fired if her till was off by $5 per day!
Those who are considered the smartest in finance are simply those willing to endanger your money without care if you lose ..................as long as they are absurdly overcompensated to the same tune that thier Harvard frat brothers are for bankrupting the rest of us!
Since the great volitility of fuel prices hit hard in 2008, all transportation companies have instituted fuel surcharges that are keyed to fuel prices.
That means that the fuel costs are removed from the loss equation -and- therefore had better be removed from the profit equation as well.
has anyone noticed that everything Jimbo touches turns to ...well, you know? He tells us a week ago to buy gold....then it tanks...nice job
Not that I listened to him...I bought when it was low...7 years ago...
this guy should change his name to anti midas
everything he touts plunges
then he makes it even worse with his shrill inane diarreah babble terminology
he says he's here to educate us
educate me on your high yield strategy pick of con ed
you say while it goes down i'm getting paid to wait
then the market goes up and it goes down more
man i need education
MSN Headline: "Bear attacks couple in their N. Carolina home."
... And I thought that all bear attacks occured on Wall Street.
It looks like my late eminent cousin -- Lord Eric Roll -- was right:
NOW IS THE TIME TO BUY! MODERATION IS FOR MONKS! TAKE BIG BITES BEFORE THS PLATE PASSES!
Jimmy: Plunging Commodites , Europe is a big problem , but there could be a silver lining . Your big problem is your plunging into a big killjoy Jimmy keep looking for good . I bought Rimm late yesterday , this was good. Greece , Spain , Portugal ,Italy , Is not Arizona and Texas , Greeks, Spanish ,Italians, Portugese have they ever gotten along ? Buy USa buy Canada . Stay positive
even if your wrong for a few months .
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Stocks drift lower and bonds are hit as investors await the Fed. Prepare for higher volatility this week.
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