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This column by Jim Cramer originally appeared on RealMoney earlier Sunday. Try a free trial to RealMoney.
How big is the rebuild for Japan?
I think that it is one of the largest ever and will directly impact everything that is required to rebuild cities.
It will not necessarily cause dramatic earnings spikes to all companies in the infrastructure business. Yet the magnitude of the event leads one to expect that steel, lumber, coal, aluminum and copper producers -- as well as related mining excavators -- will continue their Friday rally -- at least until this incident is less top of mind.
The big issue is the Chinese demand for these same materials and materials-handling plays. We know that going into Friday's disaster these were what I call "easy shorts," because so far Chinese tightening had failed to stop the inflationary growth and we didn't have enough demand here and Brazil didn't have enough demand there to offset.
I now think we do have enough to offset and, for now, China's tightening is irrelevant.
The scope of the disaster will control demand, though, and it was, of course, much bigger than initially thought, in part because the damaged nuclear reactors will most likely cause whole cities to be built away from the blast zones.
Of course alternative fossil fuels coal and natural gas will spike, with coal being an international fuel with prices set worldwide. Because of the fractured nature of the natural gas market, it will spike only regionally, however.
The need to build a whole new portion of the power grid, though, will be a boon to the
Caterpillars(CAT - Get Report) and
Fluors(FLR - Get Report) as well as the copper and aluminum companies.
All in all, it is too early to project how badly it all is. There will be a wave of fear selling from this disaster. But there will be a wave of orders, and that's going to be reflected with buying tomorrow morning right into what could be retail trepidation about the fragility of all things, not just stocks that always see knee-jerk selling.
At the time of publication, Cramer was long Caterpillar and Fluor.