Every day I hear the same concerns from both professional and individual investors. How in heck can I invest in this environment, where the president lashes out at Nordstrom (JWN) because they may have slighted his daughter, or at the media as fake for not writing about the crowds that surround his every move?
His standings, his ratings taking in those who mock him and those he mocks are salient in the war for the hearts and minds of voters and supporters while they are grist for the mill of the haters.
But what do they really have to do with the all-time highs we hit today with the Dow, the S&P and the Nasdaq?
I think those who want to fight this rally have to recognize that perhaps it isn't a rally but a sea change where we are no longer held captive by the chains of the years before President Trump. We are not captive by the statements of the Fed. We are not captive by the wars between the Democrats and the Republicans. Like it or not, the Republicans have been able to win on everything they have set out to accomplish.
Instead, we are captive to far greater forces than we would like to realize. I say this because I am scrutinizing the all-time highs and I recognize that, with the exception of a handful of defense contractors, I see companies with stocks that are rallying because of the possibilities of worldwide growth without worldwide inflation.
I know we want to view ourselves as the engine of the world. But when I see the stocks of giant industrials and transports that are leading this rally, the Deeres (DE) and Honeywells (HON) , the Cummins (CMI) and the Parker Hannifins (PH) and Norfolk Southerns (NSC) , I say to myself there's something bigger going on than just tweets out of a White house. When I see all the banks hitting 52-week highs, I know loan growth must be going up and the banks must somehow be unshackled or perceived to be unshackled soon.
And then I see the techs roaring and, perhaps most important, Apple (AAPL) hitting a new high, I know that those who keep back or scale back their investments because of worries about Trump may not realize that Trump, too, might be swept up in something bigger given the breadth of the move we are having.
But let me not bury the lead too far down in the story. I am in San Francisco because I want to know more about what's driving so much of this strength. Sure, the animal spirits can be a force beyond so many groups breaking out, and to be fair to this market, I have never seen so many groups break out at once. But much of the rally has its roots in what was invented here.
You may think that when you see the industrials flying high, it must be because they have orders galore. What I would say is that they have enough technology within their walls that when they do get some orders, there's more profit than ever before. When you see the banks' stocks increase in value, you need to be thinking about all of that cloud-based and mobile technology that is at work to bring out the maximum profit -- a profit, by the way, that might have been halved or worse if there weren't the innovations we are going to explore out here when we define the future.
And believe me, for Apple to hit a 52-week high? Well, let's spend a few minutes talking about the most widely held stock in the universe, one with a market capitalization of $700 billion, about $200 billion more than when CEO Tim Cook came on our show, yep, 40 points ago, and had to fight to be heard over the critics and the doubters with their drumbeat of the company's best days being behind them.
In many ways, Apple is a consortium of winners. It's everything from the semiconductors in the iPhone, to the glass on the screen, to the software that powers all the apps, to the phone companies that are at war to get your business, as we saw today with Verizon (VZ) cutting its fees to keep you with that phone company and not defect to the once also-rans, Sprint (S) and T-Mobile (TMUS) .
Do you think Apple's stock price is determined by the White House? Sure, the company has a huge cash hoard that can be brought back to the United States to be used for who knows what if we just get the legislation to let it occur.
What's driving the stock of Apple, though, is something I think is quite different, a realization that Apple's worldwide sales are coming in better than expected and its revenue stream for its services is coming in better than expected and its design and manufacturing supremacy is leaving its longtime competitor, Samsung, behind.
Yes, Apple is the perfect metaphor for those who keep thinking we are a tweet away from a bear market. Sure, if Apple doesn't get the pick of the engineers it wants worldwide because of visa restrictions, perhaps Samsung will get the jump on them. But the strength of this company is not within our borders. It's throughout the globe, and while our president favors America first, Apple has a customer-first philosophy that knows no borders.
We've been coming out here for a couple of years and it is worth noting that each time we did we had to emphasize FANG -- that's right, Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Google (GOOGL) , now Alphabet. Do you know why? Because they were the only companies that people would truly pay up for because they had growth that wasn't supported by the Federal Reserve and its desire to keep rates low. (Apple, Facebook and Google are part of TheStreet's Action Alerts PLUS portfolio. Amazon is part of the Growth Seeker portfolio.)
FANG's not an afterthought by any means. It's still front and center. But we are now talking to companies this week that have figured out how non-tech companies can harness the greatness of Amazon Web Services by using technology that links them to the web, or makes them more relevant to the social and mobile and artificial intelligence that these companies have inspired.
I came out to California to examine the new industrial America, but this time I think it's the old industrial America using what's invented here to dominate and prosper in a world that's stronger and unbound from the man in the White House, even as many think that he's behind it and can take it away with an errant tweet.
