Oil is the Key Globally

By Jim Farrish | June 20, 2008 | 10:00 AM | 1 Comment

The S&P 500 held support, Tech rallied and oil moved lower. The market is trying to make a go at support, but the picture looking forward hasn’t changed. The key as we have stated many times is oil. The drop below $133 yesterday was a key and will remain one today. Futures for oil are up more than $2 this morning so we will have to see how that plays out. My bias remains to the downside as the trend has shifted this week confirming the direction. Review yesterday’s post for some specifics on what I am looking at there. I also responded to one of the comments on financials and we got part of the pullback yesterday in the afternoon rally for the sector.

One of the areas of the market that continues to show promise despite the slowing is infrastructure. Looking forward this is a growth area both domestically and internationally. In the US the need to rebuild bridges, water lines, sewage facilities, mass transportation and electric power plants is way behind schedule. Emerging markets are putting additional pressure on demand as well. This leads us to the opportunities that exist for the sector as well as the companies which will supply everything from design and materials to construction.

With this being a global issue and not just domestic you have to look at companies with global arms that will benefit from this growth. Some of the companies we have found in scanning this are: (NYSE: SLB), Schlumberger, (NYSE: EXC), Exelon, (NYSE: FLR), Fluor Corp, (NYSE: CBI), Chicago Bridge & Iron Company, (NYSE: MTW), Manitowoc Co., (NSDQ: FSLR), First Solar, (NSDQ: FWLT), Forest Wheeler, (NYSE: HES), Hess Corporation, (NYSE: BIP), Brookfield Infrastructure Partners, and (NYSE: GE), General Electric. We continue to scan this sector looking for components best positioned. 

A link to a piece on A link to a piece on BIP.... "In the never-ending quest for quirky holdings that might be able to deliver equitylike returns with little or no correlation to the U.S. stock market, as well as a decent dividend, here's a look at Brookfield Infrastructure Partners..." http://www.thestreet.com/story/10421479/1/an-infrastructure-play-to-help-diversify.html The author admits that BIP (and others like it) are a little harder to follow and analyze, but makes the case that it is still a good investment. Submitted by BVictor1 on Fri, 2008/06/20 - 11:46am » reply |