You have to be crazy.
That's what I would have said even a year ago if you told me this market could hang in with the biggest company on Earth giving you a very sub-optimal forecast. Given how huge the tech sector is and how tight the grip of the stock is on the investor class' psyche or investors, I would have expected us to be down huge, especially given the previous disappointments from the sector.
But this era, the one that started in the second week of February, is so different from all markets past that I can recall that it's worth stopping everything and opining on what the heck is happening here. Oh, and let me throw in a little dollop of history to get started.
Ever since stocks started trading in lockstep courtesy of the commoditization of equities through the futures markets, the entire stock market tends to get crushed by a few high-profile disappointments. A stock like Apple (AAPL), with an astonishing half-trillion-dollar market cap, could push down the worth of the entire S&P 500. We would ascribe some of its gravitational pull to the sheer nature of its size. Most likely, though, we would extrapolate some of the salient points made repeatedly on the call -- macroeconomic weakness, a strong dollar, slowdown in Chinese sales -- and say there's no way things are as sanguine as we thought just the day before.
When you stack it with some of the most high-profile disappointments of the earnings season, namely numbers from Netflix (NFLX), Alphabet (GOOGL), Microsoft (MSFT) and Twitter (TWTR), investors would be running for the hills all over the place. Remember when you used to hear mumbo-jumbo like, "It's a risk-off moment," worthless nomenclature that described a broad market selloff? You would have certainly heard it this time.
Instead, what happens? The Dow, which is heavily weighed down with Apple, actually climbs and it's instructive to note what climbs with it, namely the sectors of the market that are in unshakable bull-market mode.
Yep, just as the now notorious FANG stocks were able to plow forward endlessly on their own, with the rest of the market oblivious to the romp, these roving bull markets just keep stampeding Wall Street with outlandish power.
Let's start with the most salient: the oil bull market. This group, in retreat since the summer of 2014, has come back with a vengeance that mimics the FANG move from its bottom, except it has much broader pin action, a head pin that can give you at least a spare even with a love tap.
That's because oil's got ramifications that are much broader than the stocks themselves. It's become the ultimate barometer of the pressure in the system. When it goes down, we think banks are threatened, China's stalling and dividends are in danger.
When it goes up, though? Holy cow, we can only conclude that China must be booming again with new car sales leading the way. Americans must be traveling more than we thought and therefore spending more money. Reserves taken by banks for criticized loans might be reversed. We're over the hump when it comes to distressed loans and bountiful capital spending could be ahead.
While I don't think oil should be ascribed all of these magical powers, I recognized a bull-market move when I see one, a move that just gets wider and wider as oil heads, seemingly inexorably, to higher ground.
Initially, this move just embraced Exxon (XOM) and Chevron (CVX), the best-capitalized companies in the group. I get that. While both of these companies report at the end of the week, Exxon lifted its dividend 2 cents a share in the face of a ratings downgrade no less, an action taken in the wake of its loss of a triple-A rating just yesterday.
Then the move extended to the best-capitalized oil service company, Schlumberger (SLB), which took the extraordinary action of laying off more than 40,000 workers as soon as it pronounced the downturn long-lived, well before others.
Next, in keeping with the early February bounce off $26 a barrel, we began to see a remarkable run with the smaller independents after they issued equity. Rather than just be weighed down by the dilution, they soared.
Now it's the big international companies that are having their heyday. The French giant Total's (TOT) been soaring. Even BP (BP) has started to gain strength as its cash flow remains robust despite the seemingly endless payments stemming from the disastrous Macondo spill.
Next up? As large as the tech cohort might be, I always look to the financials for a pulse of the broader markets. It's so difficult to rally with the banks going down because they are the lubricant for commerce. But the economy worldwide is stabilizing and the labor market is strong, something we learned when the Fed once again prepped us for higher rates in the future, and that's just plain bullish for the likes of JPMorgan (JPM) and Wells Fargo (WFC). The group's caught a bid ever since we saw oil cross above $40, and it doesn't show any sign of quitting. Why not? The stocks are real cheap and have been left behind by the rest of the market and the Fed's giving everyone a positive spin. You could interpret its comments that the world's a better place as bullish for the big banks, but that the economy's still too weak to tighten, which is great for everything else. You want a real sign of good health? Continued upward movement in Goldman Sachs (GS) and Morgan Stanley (MS), signaling that the capital markets could be getting stronger. (Apple, Alphabet, Twitter, Schlumberger and Wells Fargo are part of TheStreet's Action Alerts PLUS portfolio.)
Then how about those rails? I sing their praises because they move huge cargos. When you get them chugging this many days, you have to believe good things are afoot.
Or how about these industrials? They are certifiably in insane bull-market mode. Not long ago, when United Technologies (UTX), a classic industrial, was wallowing in its own red ink down in the low $90s, Honeywell (HON) attacked it with a takeover bid that could be valued as highly as $105 to $106. United Technologies' CEO told me and my colleagues on Squawk on the Street that it ain't gonna happen and that if you gave him time he'd get the stock there. Today it exceeded the bid price after an amazingly good quarter. Don't cry for Honeywell, it's screaming, as is Boeing (BA), Parker Hannifin (PH) and Alcoa (AA). Oh, and how much do the bears want Caterpillar (CAT) to go down? How about not as much as the bulls want it to climb.
But you want to know what the piece de resistance is on this shrug-off of Apple's forecast? Tech itself. IBM's (IBM) not in any mood to go down, it just keeps recovering from what looks like a glancing blow of a so-called bad quarter. Intel (INTC), Advanced Micro (AMD) and Micron (MU) resumed their climbs. The cybersecurity plays, high-multiple stocks all, have suddenly caught fire, led by Palo Alto (PANW). Incredibly, even some of the Apple parts makers aren't going down. Skyworks (SWKS) places a huge amount of electronics into the Apple ecosystem and it's rallying, as is NXP (NXPI), which makes the near-field communications portion of much of the Apple universe. Broadcom (AVGO), after getting slammed with the rest of them at the opening, roared right back. That's outlandishly positive.
I don't want to go overboard. But the bulls turned bears from the start of the year with that nasty downturn, and those who keep waiting for the Fed to hike just get overwhelmed by the mini-bulls, the ones who are leaving behind last year's uber-winners, and just keep stampeding higher when you least expect them to.