The current market situation has everyone on pins and needles, said Aaron Task on Jim Cramer's "RealMoney" radio show Monday. Task, co-executive editor of TheStreet.com, will be filling in for Cramer this week.
In fact, the volatility of the marketplace brings one particular word to mind: schizophrenia, Task said, referring back to Cramer's May 24 show. On that broadcast, Cramer had used the word to describe the sense of unpredictability that reigned in the market.
The one common denominator in the shifting of the market is the
, Cramer had said. Whenever there is strength in the economy, people become petrified that rates will increase, and weakness makes people happy, he had said.
During his trading life, Cramer said he had never seen such a short supply of copper. China has a huge demand for copper, and the Fed is quelling the commodity's demand, he had said on the May show.
This is killing business activity because of concerns of what the Fed might do.
It's all about Ben Bernanke and the Federal Reserve this week, Task said, adding that it is more than likely going to raise rates for the 17th straight time.
Today new-home sales were higher than expected, which in turn caused dread that this might cause the Fed to tighten rates by 25 basis points, or even take a big step and tighten them by 50 basis points, instead of making incremental rate hikes, Task said.
This is the opposite setup market players had heading to the last Fed meeting on May 10, when people thought the Fed was finished raising the rates.
Oil, the main generator of energy on the planet, has the power to swing the market, said Task.
On his June 5 show, Cramer had called oil the one product that could swing the market at will, saying that oil also determines whether we're having a good or bad day in the market.
It's a good day when oil is down, and a bad day when it is up, he had said, adding that threats to crude's supply and demand, and geopolitical news are two factors that affect oil's price.
Iran is threatening to stop its supply of oil to the U.S., and there are stories that Iraq's pumping ability is so weak, it can't even supply oil to its own people, Cramer had said.
And rumor has it that Saudi Arabia is running out of oil, he had added.
There is a lesson here: The current oil market is the reason you should get into oil stocks, Cramer had said. Even though oil is up, oil drillers are down huge.
Task welcomed Chris Edmonds, the managing director of research at
and contributing writer to
, onto the show.
Task asked for Edmonds' thoughts on whether the U.S. is on its way to getting decent oil production from Iraq.
The country is a ways from meeting full demand because of infrastructure issues, but Iraq is slowly coming back to the positive part of the ledger, Edmonds responded.
Iran is threatening to stall exports if the dispute over its nuclear activity heats up, Task said. "What is your sense of these threats from Iran?" he asked.
"I think we have to take them seriously," Edmonds said. At end if the day, Iran is trying to make a name for itself and protect its own interests, he said, adding that Iran will probably be a volatile situation during the summer.
The back and forth will go on for a while, Edmonds predicted. It's not going to be resolved anytime soon, and the same conversation over the matter will probably ensue in September, October and November of this year, he said.
Referring to oil and gas producer
acquisition of two smaller competitors
for $21 billion last week, Task asked Edmonds if he believed that this was a good deal for Anadarko.
Edmonds said that it was a good long-term deal for Anadarko because the company touted natural gas as the commodity of the future, and that's why they paid up for it, he said.
When Task asked Edmonds what the next likely takeovers in the arena are, Edmonds said he liked
was very interesting, and called
Cabot Oil & Gas
In addition, he said
has been rumored to be a takeover for some time because it is cheap, but its assets are scattered.
Until it is focused on one area, it's going to be difficult for it to be taken over, Edmonds said.
Edmonds, when asked about
, told Task that the company has had a nice run and believes that it will earn somewhere north of $2 this year.
Edmonds added that Oceaneering International is deeply involved in the Gulf of Mexico and he likes it not only as a deep-water inspection and production company, but also as a hurricane protection company.
, the land driller, which Cramer owns for his charitable trust
Action Alerts PLUS, has become extremely cheap and has the ability to earn $5-plus per share in 2007, Edmonds said.
If you're a long-term investor and understand that there can be a lot of volatility in the market, Edmonds said he would recommend Nabors.
is an attractive company below $30 (the stock was recently at $29.51).
It is attractive not only from a growth perspective, but also from a takeover point of view, Edmonds said, adding that it's a great long-term play.
A caller asked Task about
, which Cramer also owns for his charitable trust.
Task said that Microsoft is inexpensive on a historical basis, but there is a sense out there that the company is too big for its own good.
Task told another caller who asked about
that people are excited about this company and its prospects, whereas Microsoft is struggling to resonate with consumers.
Although the stock has suffered and come down a bit, it has a lot of long-term upside potential, he said, adding that the company still has not reached the saturation point for Apple's iPod product.
Task said he would be wary about
, the largest land owner in Florida.
In addition to the fact that the real-estate boom has cooled in that area, the land that St. Joe owns is not ideal for building homes, Task said.
Aaron L. Task is the co-executive editor of TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships.
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