By Roberto Pedone
Updated at 4:31 p.m. EDT on July 10, 2009
According to Jim Cramer, the the oil futures markets are being manipulated. Cramer strongly believes that the futures market isn’t the real deal, because if it were, the price of crude oil would have never reached $140. Cramer thinks any opposition to reforming the futures market should be stopped. He is publically supporting Gary Gensler, the new head of the Commodities Futures Trading Commission.
Despite that support, Cramer feels that the futures traders are far too powerful and connected in Washington to be stopped. He believes that the futures industry will lobby Congress, ask for support from the academic world and manipulate the mainstream media to back its position that the futures markets are too big to be controlled.
Cramer thinks we need a new market leader to complete the trifectra that was oil, tech and banks, now that we might have lost oil due to the manipulators. That new market leader is health care. Cramer is recommending drug stocks such as Gilead (GILD) and Abbott Labs (ABT), both of which he holds in his charitable trust, Action Alerts PLUS.
Recently, Cramer found opportunity in natural gas stocks, stocks that could be the new market leaders and gold stocks. Here are some Cramer highlights from over the past week as aggregated from his "Mad Money" TV show, the "Stop Trading!" segment on CNBC and his RealMoney blog posts. (These blog posts might require a RealMoney subscription.)
Cramer’s New Market Leaders: What sector could be the new market leader? Cramer thinks it will be health care. On Tuesday’s “Mad Money” episode, he told viewers that health care is the only industry that can have growth, even in a slowdown. Once the correction is over, Cramer thinks investors will be able to buy health care on the cheap. The Cramer’s New Market Leaders portfolio includes Allscripts (MDRX) and Boston Scientific (BSX).
Cramer’s Great Moment in Nat Gas: Cramer believes we are at a moment where nat gas companies are in great shape to make some moves. In a July 6 blog post, he wrote: “You've had to buy these stocks when they are weakest. I know that they are not 'done' being weak. But I know that they are better buys than sells down here.” The Cramer’s Great Moment in Nat Gas portfolio includes Southwestern (SWN) and Chesapeake (CHK).
Cramer’s Two Gold Stock Buys: Cramer sees opportunity in two gold stocks. In a July 6 blog post, he wrote: “Why gold? Once again, I consider gold an integral part of a portfolio when there's chaos and massive stimulus that will debase paper currency. I simply like to have a good entry point, and another one seems to be coming right along.” The Cramer’s Two Gold Stock Buys portfolio includes Agnico-Eagle (AEM).
Cramer’s Weak Oil Consumer Plays: Cramer thinks consumer stocks could be ready for a rebound now that gasoline prices are coming down. In a July 7 blog post, he wrote: “You want the pure play? Take a look at Cracker Barrel (CBRL): killed with higher oil prices as it is levered more to gasoline than just about any consumer play. It's bought back a lot of stock and its labor and food costs are going lower.” The Cramer’s Weak Oil Consumer Plays portfolio includes Macy’s (M) and Nike (NKE).
Cramer’s Slow Recovery Stock Picks: Cramer sees a slow recovery coming, one that won’t lead to a lot of jobs or spending but one that will produce a lot of profits from massive layoffs and plunging commodity prices. On Monday’s “Mad Money” episode, he told viewers that a diversified portfolio will be needed to profit from the meandering recovery. The Cramer’s Slow Recovery Stock Picks portfolio includes Palm (PALM) and Nordic American Tanker (NAT).
(Editor's note: At the time of publication and/or original publication of his posts and shows, Cramer owned Gilead and Abbott for his Action Alerts PLUS charitable trust.)
