- Soft goods with good growth overseas. Pepsi's(PEP - Get Report) now the best. Colgate(CL), after the quarter. I like Clorox(CLX). Kimberly-Clark's(KMB) now good.
- Machinery, metal and mining stocks, the infrastructure you need to take advantage of them -- and what transports them to overseas. I don't include coal because the green movement has stopped it for now and the government has given up supporting coal -- at least, until it realizes it has no choice. Caterpillar's(CAT - Get Report) right again. Foster Wheeler(FWLT) on a pullback, KBR(KBR) on a pullback, McDermott(MDR) after the quarter, Fluor(FLR), CB&I(CBI), Jacobs(JEC), Manitowoc(MTW), Terex(TEX).
- Oil -- but not gas, unless we get some sort of disruption of supply for the latter. Extracting oil anywhere but North America is the strongest area, followed by the integrated oils. Will natural gas come back? Everything will come back, but this is a checklist of what can be bought now. Transocean(RIG) on a pullback, Halliburton(HAL) on a pullback, Schlumberger(SLB) on a pullback, Conoco(COP) and Chevron(CVX) now. XTO(XTO) for those willing to wait, as this one is the best wildcatters in the world. Apache's(APA) good too.
- Tech that's international that does well as part of the back-to-school and holiday buildup. Dell(DELL), Hewlett-Packard(HPQ - Get Report), Texas Instruments(TXN), Adobe(ADBE) all good.
- Drugs that do lots of business overseas. Merck(MRK), Schering(SGP) and Lilly(LLY) all good.
- Health care cost containment. Think Medco(MHS) and CVS(CVS).
- Aerospace and defense. Aerospace because demand is international with a new product cycle, and defense because we now know the war drags on, no matter what. Alliant Tech(ATK) is the best there, now that we have seen Lockheed Martin(LMT). I would still buy Lockheed and L-3(LLL) and Raytheon(RTN). Boeing(BA) works. So does Riverbed(RVBD).
- The Web. Google's(GOOG) been punished long enough. Growth is too great. Omniture(OMTR) and Level 3(LVLT) are the preferred specs.
- Ag. Be careful about a robust corn crop, but this works into the election. Deere(DE), Bunge(BG), Monsanto(MON - Get Report).
- Telco infrastructure. They need to build. They can't help it. They have starved their infrastructure -- check
Noah Blackstein's excellent piece from Tuesday. Cisco(CSCO), Ciena(CIEN), Juniper(JNPR) and even Sycamore(SCMR) (that's how strong this is now).
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