Sell the news! The Trump rally's tired. The guy's too divisive. He will never get anything done. Time to take profits.
Twenty-four hours ago that was all I kept hearing, all I kept reading. You heard it to. "The bull's long in the tooth." The rotations are over. The big industrials that rallied and the banks that soared, all over. In many cases I heard the smart guys, the real intelligentsia, telling you that it's time to get out.
They were joining a chorus of Trump bashers and bull-fighters --often two different characters -- who had left this party a long time ago. You have heard their names, big-time hedge fund managers we have all revered -- individuals that disdained Trump's bust the budget, ill-informed analysis of what has to happen next.
In fact, it got to the point where Warren Buffett -- yes, the great Warren Buffett -- was taken to task by so may for effectively saying, 'this market's not a bubble and if you think that it's over and done for, and there's no more upside, you are simply on the wrong side of history.' How bad did it get? Someone said to me that he's become that "old gasbag polyanna from Omaha," an appellation that seemed to have a lot more gravitas 24 hours ago than it does today.
You know I have been of the opinion that we need to stop emphasizing Trump as a reason to buy stocks. Sure, we want to believe in his deregulation, his giant infrastructure spend, his corporate income tax cuts and his repatriation plans.
But there's been so much other good stuff happening, including worldwide growth, that we are wrong to pin it all on his coattails. We have seen strong numbers out of developed markets worldwide -- notably Japan, Germany and Britain -- in the last few weeks. Brazil, Russia India and China -- yes, the BRICs -- are producing some very positive economic data that shows the world is being restored perhaps to its pre-crash growth levels.
I set this view up because I didn't want anyone to be selling stocks betting that Washington had become too rancorous to believe that Trump could get anything done, and that we were developing a new form of gridlock, call it Trump vs. both Democrats and Republicans.
My view had been that in the end, even if it seemed that nothing was going to get done, it ultimately will: There's an election every two years, and the Republicans would figure out a way to get the best parts of Trump's package passed, because they didn't want to be do-nothings, and they had the majority, so it could happen.
I even pointed out yesterday that maybe it would be better if the lower taxes and repatriations were pushed out, if only so there would be something in the future that could keep this market going.
But what I didn't count on, what many didn't count on, is the President who showed up in front of the joint houses of congress last night and spoke in measured, hopeful tones, ones that made it difficult for his myriad critics to mount effective attacks against his style or substance -- or lack of it.
Now I want to be really clear. I am not saying anything political here. I am saying that style of politics matters, and the style we saw last night makes it a lot harder for those who don't like the substance of Trump's business plans to fight them. You may love the firebrand media-trash-talking Trump. But the simple fact of the matter is that the underlying current we had been getting up until last night was that some Republicans would break ranks with Trump, making it impossible to get much done.
After the more conciliatory Trump we saw last night -- actor, showman, or truth-teller -- the shoe is on the other foot. Now the question is which Democrats would break ranks with their party and come around to the idea that companies could repatriate vast sums here that might be used for common good. What rate could income taxes come down to, in order to make our companies hire more people? What about a gigantic $1 trillion infrastructure fund, seeded by repatriation dollars and bolstered by "make America's roads great" again savings bonds?
The impossible twenty-four hours ago now seems the likely today, which is how you put on such a magnificent rally.
Of course the secret sauce behind the rally always needs a spicy kicker -- and this time it's the "sell the news" kicker that had become the mantra of the smart guys all over Wall Street. The idea of many traders was pretty clear: We've gone as far as we can with Trump. We've had the 13-day record-breaking streak. We've had the bank stock run that ended long ago. We've seen the industrials peak out. The materials had begun to rollover. What is often the final rotation before a big sell-off, the money pouring into the defensive stocks, had taken root.
The market had become dull, lifeless. Plus we had some major blowups for the first time. That destruction of Target's (TGT) stock sounded as loud as a klaxon reminding us that we've all overstayed our welcome. Puts should be bought, profits taken and shorts instituted.
Of course, that all turned out to be wrong. First, you never short a dull market. That's always taboo. Second, in a classic bull market full of rotations, the groups that rallied first consolidate and then go higher -- just as they are doing. Third, I see you your Target and I raise you Lowe's (LOW) , the gigantic, do-it-yourself, big-box retailer that reported a monster good number. And finally, maybe, you will have imprinted what I have been saying forever, which is that the consumer is spending on her home, staying at home and playing and feasting at home. Just look at McDonald's (MCD) getting on the delivery bandwagon today, the one that has taken Domino's Pizza (DPZ) from $10 to $190. I remember defending CEO Steve Easterbrook, urging everyone not to sell his stock just because we were annualizing all-day breakfast. Maybe someone finally heard me?
But there's one other thing at work here that we don't talk enough about. This is a bull market. When I got in the stock market in 1979, we had bear markets and bull markets. You could freely admit you were in one or the other. There was never any harm in recognizing the bull and even cheering it on. That all changed with first crossing of Dow 10,000, which produced way too much hoopla back in 1999 and clearly led to too much optimism -- and the runup to Nasdaq 5,000 in March of 2000. Both of those proved to be disastrous milestones for investing.
It wasn't much better in the runup to the Great Recession in 2009.
So what happened? I think it can best be said that anyone who is boisterous about the stock market, anyone who says this bull is difficult to bet against, is very much at ease, because we now live in a world where it is so easy to call up the tape, to get the video and see how wrong that prognosticator was.
Don't you find it ironic that we don't castigate all of those big-time managers who told you to sell this market? Don't you think it rather amazing that no one goes back to those investors and says, "You sold way too soon, what are you doing now?" Or how about "thanks for nothing"?
But they took the percentage play. A few weeks ago, I came out here and said this bull is hard to bet against. I then followed comments on social media, where I have more than a million followers, and I can't tell you how many said, "when Cramer says it, that's the top. I am selling everything," or "there you go, get out now, you have to bet against this clown."
Now I have long since learned to take this in stride -- and I am grateful to my eldest daughter, who taught me to hit these people with smiley faces and then block them.
Nevertheless, you get the point. If everyone's cowed and so few want to say "this a bull market and it's hard to bet against," then you are going to have moments like today, where the whole thing just explodes up in your face. And that, coupled with a kindler gentler Trump, explain best the snort and the roar of a very live bull trampling over the bears in one amazingly positive session.