We Get a Break From Europe's Woes

 | Nov 10, 2011 | 1:47 PM EST
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New benchmark: Keep Italian interest rates below 7%, and we can buy Cisco (CSCO)! Yeah, it really is that stark, isn't it?

We can see where the market wants to go without Europe, and that's toward companies that blow the quarter out and back it up with firepower, like Viacom (VIA.B), or companies like Cummins (CMI) and Caterpillar (CAT) and Honeywell (HON) that are able, unlike General Motors (GM), to make enough money away from Europe to ease the pain of the Continent.

Now, we know that all of these companies are part of the S&P 500 wave that washes over the bad when there's not a crisis in Europe. But I have to tell you that this market, once again, gives you a terrific opportunity to reshuffle your deck at good prices to get out of what's dangerous or too volatile if you can't handle it, and into Merck (MRK) and Abbott Laboratories (ABT), which haven't been affected by Europe at all, or Domino's Pizza (DPZ) or Kohl's (KSS), which have good momentum and no Italy.

This market's not easy. On Tuesday we couldn't care less about Europe, and the CurrencyShares Euro Trust (FXE) zoomed, even though there wasn't a soul I know who didn't think 7% was coming our way for Italian bonds.

Then they get there, and we freak out. They come back, and we are in heaven.

Twenty-five basis points. That's what stands between the bull and the bear. And they aren't even our basis points. But at least we know what triggers it!

Random musings: Bravo to Starbucks (SBUX) for going to the juice. Will be brilliant. Hats off to this incredibly well-managed company.

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