The market is concerned about inflation. However, there is a difference between now and the 1970s. In the '70s, commodities had a run, but so did wages, stoking inflation in a huge way. Now the commodities are having a terrific run, but with the globalization of the world's labor market, we still have low labor-market prices.
This, in my opinion, will allow commodities to be bullish, without igniting the Fed's inflation alarm. Though I feel inflation has and will creep into the market to a degree, I do not believe we are seeing a repeat of past cycles. A commodity bull market presents several buying opportunities. You can buy stocks or commodities that are participating, or you can buy stocks in companies that will benefit from rising commodity prices. One dormant technology that finally shows signs of life in the U.S. is nuclear technology. China has stated that it will build 40 new nuclear power plants, Japan 13 and even Turkey three. France already gets 78% of its electricity from nuclear energy. The U.S. is about to get on board the nuclear train. In an attempt to encourage nuclear plants, Congress included a risk-insurance provision in its 2005 Energy Policy Act. The provision will cover $500 million in delays for the first two nuclear reactors built, and $250 million for the next four. The federal energy bill also provided billions of dollars in subsidies, tax breaks and incentives. My pick in nuclear technology is Exelon (EXC), America's largest and most profitable nuclear power-plant operator. Exelon is also going to become the world's second-largest after this summer's acquisition is complete with New Jersey-based PSE&G (PEG). Once combined with PSE&G, Exelon will have an estimated $27 billion in revenue, with an estimated $3.2 billion in net income in 2006. Analysts estimate further 30% growth in 2007.TheStreet Premium Services For Personal Service: 877-471-2967
Jim Cramer's Action Alerts PLUS:
Trade right alongside a Wall Street pro — enjoy access to his Charitable Trust portfolio and be sent trade alerts BEFORE he makes a move. Learn MoreETF Profits:
Get money-making ideas from the hottest investment vehicle on the planet. Our experts show you how to play various ETF sectors to help pump-up your portfolio. Learn MoreOptionsProfits:
Get 50+ trade ideas a week from the industry's top options experts. Plus — exclusive commentary on market trends and essential trading tools. Learn MoreReal Money:
Our team of professional Wall Street Pros — including Jim Cramer, Doug Kass, and Nicholas Vardy — delivers intelligent analysis, timely trade ideas, and colorful commentary. Learn MoreStocks Under $10:
Break into the market with small- and mid-cap stocks... all $10 or less! David Peltier tells you exactly which low-priced stocks he's buying and selling. Learn MoreTo begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
blog comments powered by Disqus
| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 12,783.82 | 1,351.95 | 2,927.23 | 19.84 |
Oil *
116.89
|
|
DOWN
106.64 |
UP
1.99 |
UP
11.37 |
DOWN
0.63 |
10 Yr
1.98%
SPDR Gold
168.02
|
|
-0.83%
|
+0.15%
|
+0.39%
|
-3.08%
|
Data delayed 20 minutes |

Connect with TheStreet