Trump this. Trump that. It's all because of Trump. I am talking about the rally we've had and how the media are so willing to pin every bit of it on the policies of President Trump because it seems so clear-cut that it falls on his shoulders given the timing of the advance.
I am not disputing the calendar. It's too coincidental and ignorant to say Trump has had nothing to do with it. He deserves plenty of credit. But when I listened to Treasury Secretary Steve Mnuchin this morning in Becky Quick's excellent interview on CNBC, I recognized that perhaps we are putting way too much of the gains on the president's coattails. Yes, Mnuchin made it clear that the stock market can be a report card on the president's job. And right now it's all A's. But let's give some extra credit to others before awarding Trump summa cum laude at the beginning of his term.
Look, I recognize that this is the most pro-business administration I have ever seen. The president again called in American business leaders this morning to try to figure out how to create more jobs here, including business leaders with a long history of building plants outside our country or offshoring jobs to them.
You simply don't want to be the executive who announces that the next plant's being built in Mexico. The constant interaction among some of these executives, like Ford (F) CEO Mark Fields and General Motors (GM) CEO Mary Barra and Marilyn Hewson from Lockheed Martin (LMT) , who seem to be the most "in touch" with the president, will serve to remind all of these execs that they can advance to the next level with this president if they pledge to build and hire here and keep costs down if you're feeding at the federal trough. (Ford and Lockheed Martin are part of TheStreet's Dividend Stock Advisor portfolio.)
I joked this morning on Squawk on the Street that while the president has broken these execs into teams to get more work done, to me it is a bit like The Apprentice, where teams would compete for Trump's affection and the best way to win is to announce you'll put more jobs here than any other contestant. The wags on Twitter thought this a tad demeaning to the process, but I say wait a second, if you campaigned on bringing jobs back here and creating new ones, you couldn't be doing a better job than Trump right now.
Trump, by his own admission, is ratings-obsessed, so it's not too farfetched, is it? As a former judge on The Apprentice, I can tell you Trump was deadly serious about who was doing the best job. CEOs who hire here may be the ones he really counts on if things stall out.
And why not? This president isn't just pro-business. That sells him short. He knows business. He may know more about how to create and advance jobs than anyone who has served in the Oval Office. Frequent guest Andrew Liveris, CEO of Dow Chemical (DOW) and the head of the American Manufacturing Council, said today that Trump's the most pro-business president since the Founding Fathers. I was stunned by this because, well, name me a Founding Father who was more pro-business than this guy, and I am including the guy from the Broadway show.
But to go back to the Mnuchin interview; what I was struck by more than his or the president's pro-business credentials is how far away Trump is from getting through his signature tax reform plan. We got a bold call from Mnuchin that we'll get something big by August. However, if you are buying stocks on that belief, I think you are being premature, particularly because there seems to be no consensus between the White House and congressional Republicans on what the tax package will look like. Will it be tied up with individual income tax? Will there be a border tax? I'm calling Mnuchin's observation "optimistic."
Which brings me to some of the other reasons why we may be rallying -- the extra credit, so to speak -- because this rally is way too powerful to be all Trump, despite the endless attempts to paint it as such.
First, I know Trump says he inherited a mess, but to be fair, job growth near the end of President Obama's term had been pretty robust. There is no doubt when you listen to all the conference calls, as I do, that those with jobs feel more confident, and that can explain some of the recent pickup in spending, particularly in housing. Let's just say there's an overriding belief that Trump won't make it more difficult to hire or create new business and his deregulation stance will make it easier to get capital from banks to build and expand.
Second, I think the end of gridlock does create tremendous opportunities, but nothing's been accomplished so far, beyond the grudging approval of Trump's pro-business appointees. We know there will be agreement with the White House someday, maybe just with a straight-out reduction in corporate taxes. Right now, though, it's all up in the air. Hence my skepticism about the August deadline.
Third, the president hasn't had any luck getting through a $550 billion infrastructure program to rebuild our nation's sagging roadways and airports, but Mnuchin did hold out the possibility that something here could happen. I have been pushing a 50-year or 100-year Make America Great bond to get it done, but can I add, at the suggestion of my writing partner Matt Horween, that a savings bond wouldn't be such a bad idea either. But it's all drawing board so far, nothing more.
Congress is far more focused on the repeal and replacement of Obamacare than anything like creation of jobs to fix our pathetic infrastructure.
Fourth, we have to admit that perhaps the most stunning aspect of today's interview with Mnuchin is what wasn't said: He's not blasting other countries for manipulating currencies. He's not calling for a trade war. He's pro-strong dollar like all other Treasury secretaries, even as if we had a cheaper dollar we would presumably have more trade.
Let's go one step further. If you look around the world, you are seeing green shoots, better growth and higher stock markets everywhere, with nothing being held back by what many thought would be huge trade barriers erected by Trump immediately. Sure, our banks are soaring, but have you seen the British banks, like Lloyds LYG or Barclays (BCS) ? How about Credit Suisse (CS) and Deutsche Bank (DB) or Banco Santander (SAN) ? They are all doing better. We have down-and-out companies like Vale (VALE) and Petrobras (PBR) from Brazil really coming back to life. We are experiencing a turn in the fortunes of India and China and Russia. Yep, I hesitate to say it, but BRIC is back. We are getting a pickup in business all over Europe. Mexico's peso is soaring. You heard me, even Mexico's doing better!
Again, I am not saying the administration isn't doing all it can for job growth. But let's remember that much is on the come and most likely won't be delivered this year if Congress doesn't get its act together.
In the meantime, I have stressed that individual companies have seen a resurgence in their businesses not just because of our growth but because of the world's growth, too. Just think of international companies in the soaring Dow Jones average that have said in the last week things are better: 3M (MMM) , Boeing (BA) , Visa (V) and Cisco (CSCO) . Throw in tangential world growth and we can add Home Depot (HD) and Walmart (WMT) . Of the 30 Dow stocks only Chevron (CVX) , Exxon (XOM) and Verizon (VZ) haven't delivered on the numbers. (Dow Chemical and Cisco are part of TheStreet's Action Alerts PLUS portfolio.)
As a stock guy, it's pretty joyous to have an atmosphere in Washington that doesn't hate business and pays attention to stocks and actually wants higher prices. But let's be clear: There's plenty that Washington's still standing in the way of that's being helped by American executive ingenuity and a world that seems to get stronger by the day. Give credit to this market where credit is due and recognize that the bull doesn't just reside at 1600 Pennsylvania Ave.
