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Oil's not a tax on everything -- it's a tax on the consumer. That's what I come down to when I see the charts this weekend and ponder what's happening in so much of industrial America.
Company after company that I examine -- the new techs, as I call them -- actually benefit from higher oil prices. Or they can pass them on with ease, because of the worldwide demand being so strong.
Take all of the companies involved with making a
: Boeing itself,
being good examples. Each of these is necessary because the new Dreamliner burns lots less fuel, and with fuel the biggest airline cost, it stands to reason that higher energy prices make the plane more desirable even at a higher price point.
Or how about all of the companies involved with process and flow control and efficient motors:
. Those work higher with higher energy prices.
Kansas City Southern
are smaller energy users than trucks, and they ship plenty of ethanol and fertilizer.
Of course everything farming:
(these are big companies in market cap now, powers of the
or companies just waiting to get into the S&P but stalled by a lack of mergers). And everything that drills, ships and transports oil and gas:
and so many others -- and of course,
And then there is oil and gas itself, ever a larger portion of the S&P. Look at the charts during last week's run:
: these all count.
Coal, of course, is a huge beneficiary. Infrastructure works because these companies get the benefits of the oil companies' largesse by being able to build energy-related production centers.
Even the autos can be viewed as benefitting, as the newer cars use less gas than the old ones, making them viable alternatives in multiyear paybacks. Along those lines, energy-efficient appliances get a boost.
Then there are the myriad energy-alternative plays that are always dominating the headlines but haven't yet made it into the S&P or are very small parts of the S&P: the wind plays --
(also insulation); solar --
($24 billion market cap),
, and all the Chinese plays that people love so much.
, so many others.
Many companies are neutral -- financial, telco, utilities -- although some benefit from the price umbrella of higher oil costs and can pass on costs they don't have. Tech's been fairly neutral. The weaknesses we have seen in tech are related to consumer slowdown (customers such as
) or financial. Media's neutral, too. Health care can't be considered a negative either when it comes to energy consumption.
Most of the conglomerates say they are energy-positive:
, which has said that its fortunes should improve as oil goes higher, although we haven't seen that yet.
We know there are plenty that don't. Anything that is sold in the supermarket. Anything retail. Anything that uses oil or natural gas and can't really pass it on: Minerals and mining (although global demand really helps), glass (although recycling really helps, as in the case of
), and chemicals and the paper producers.
But those companies aren't that important anymore, even though they dominate the consciousness of the marketplace, despite the encroachment of energy as a part of the S&P 500.
In fact, if finance could turn itself around -- something that seems increasingly possible, although it has sucked up a huge amount of capital and done nothing -- you could argue that we are on the cusp of a major move as it dawns on people that energy isn't the tax it used to be.
There are plenty of 30,000-foot flaws to this. We have seen time and again that our own growth in this country is heavily consumer-related. But the industrial growth owes itself not to the U.S. consumer, but the worldwide consumer.
All of these facts can go far toward explaining how higher oil prices have not been able to block the advance of the S&P or the
averages. In fact, if the latter were more responsive to energy -- the Chevron nod was accompanied by ne'er-do-well
Bank of America
instead of a Deere or another oil play like an Occidental or a Schlumberger -- we would be taking out 13,000 with ease.
All of this is worth thinking about when you are gloomy, because it doesn't add up to a decline, it explains the
Keep it in mind during the next downturn. It explains a lot why they've been fairly shallow.
And I don't expect anything deeper now that finance seems to have stabilized.
At the time of publication, Cramer was long XTO and Owens-Illinois.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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