We live in sadly cynical times. We get a horrendous event from Las Vegas and our hearts burst and our shoulders heave and we feel nothing but sadness. We know, though, that it's a continuum. This isn't the end. There will be others. Is that cynical? I don't think so.
What's ironic, though, is that this market is about as uncynical as you can get. As we start the fourth quarter, I see rallies in stocks that you would only see if you believe in progress and believe in the ability of companies to navigate waters that heretofore would be considered un-navigable if only because of the terror of the time and the inability, seemingly, of anyone to make sense of things.
For example, we have our Secretary of State working diligently to come up with a way to avoid nuclear war. This man, Rex Tillerson, is working mightily, using all the muscle he has, to make it so the Chinese at last clamp down on the North Koreans. Who knows what suasion he's using? But at the exact same time it looks like he's making progress, our president belittles the whole mission by saying Tillerson's wasting his time with little Rocket Man and that he will be dealt with in another fashion.
Normally, that would be enough to smack down the market. Instead, the market just shrugs it off.
We have a wholesale rebellion in a part of Spain that has long threatened revolt and a desire for independence. A Catalan insurgency has always been the subject of tremendous fear for Spain and the continent. Instead it seems to have no impact.
The president's men were out in abundance talking about the new tax plan this weekend, but all I heard was a bunch of hard-to-understand provisions and a sense from the media that this one's a giveaway for the rich, even though if you are from high-tax states it's anything but. Still, the confusion dims the plan's chances. Nobody seems to mind, though.
Then there's the events of this weekend at the Mandalay Bay. The horror. There would have been another time when this senseless act would simply cause us to take stock, freezing the market in its place or sending it down.
Nope. This market rallies.
Even more important, what rallies is so uncritical that we have to note how true believers frantically put money to work right in the face of domestic and global uncertainty.
Let me go over the examples of the lack of cynicism in investments and the ability of the dreamer investors to dream and the hard-nosed traders to find areas to exploit despite all the uncertainty around us.
Case No. 1: General Motors (GM) . For years, we have heard that the future of General Motors would be dimmed by autonomous vehicles and the lack of a need to own a car because of ride-sharing powerhouses like Uber and Lyft. But GM under CEO Mary Barra has made tremendous strides in autonomous-vehicle building and has an investment in Lyft. Plus, the company is pledging to build 20 electric-car models in the next six years, something that would be incredible, especially for China, where the company already has a big leg up.
Suddenly, instead of ignoring or dissing the stock of GM, investors are clamoring for it and it rallies more than 4%. The valuation had been suppressed by these long-term worries. Now it is being advanced by them.
Or how about the stock of Disney (DIS) . I had a sense in last week's game plan that if Altice, the big cable company, didn't drop Disney in its contract dispute that people would come to their senses and realize that Disney's business model isn't in doubt and that its other methods of distribution are bearing fruit. I sounded like a Pollyanna, but this is a market that embraces the simple and the stock is running. In another time, that dispute would have been viewed as unimportant. Instead it's a clarion call to buy the shares of one of America's iconic companies.
I suggested on Squawk on the Street today that perhaps we would have to adopt the Jordanian model for hotels going forward after this terrible tragedy. A few years back, my wife and I checked into a Four Seasons in Amman and we were surprised to see everything have to go through a screener. Everything. We discussed it with the manager simply because we wanted to know if there had been an incident at the hotel. He told us a hotel is a crowded place and those are targets, so why allow guns or bombs to come into them? It was so common-sensical.
So it is also common-sensical that the biggest publicly traded maker of screeners, L3 Technologies (LLL) , would see a big run in its stock. It didn't initially. But, again, another hallmark of this market is how slowly it adopts the possibilities, so there's time to get in. I haven't seen that in ages either.
Sometimes it is as simple as a research note that resonates. This morning, Morgan Stanley upgraded the stock of Stanley Black & Decker (SWK) . There were a number of good points made, including that it's now able to add the Craftsman line that it bought from Sears (SHLD) to big-box retailers. I think the recommendation resonated, though, as another way to invest in the big rebuild that comes from the hurricanes that hurt Texas and Florida so badly. Makes sense: Home Depot (HD) and Costco (COST) , considered winners off the damage, sell plenty of Stanley Black & Decker tools.
I saw several notes this morning about the possibility that Nelson Peltz will win his attempt to get on the board of Procter & Gamble PG, aided by Glass Lewis and ISS, two companies that advise money managers on proxy fights. That's enough to carry the day for Peltz. What's interesting is that I heard a new narrative about the insurgency. If Peltz wins, there could be some important questions raised about the way Procter & Gamble spends money. If he loses, he may redouble his efforts next time. The term "win-win" is being thrown around a bit. That's another sign of how this market embraces the positive and sees a glass half full as three-quarters full -- at a minimum.
It is possible that some things might be aiding today's performance. The beginning of the month can be a time when new money is put into the market by those who have IRAs and 401(k)s, while at the same time a lot of hedge and mutual funds might be finishing their September selling.
Second, despite the long memories people have for the 1929 and '87 October crashes, the month's a benign one, filled with some rather dramatic increases in the last decade. It's been a pretty good month overall.
Finally, even as the dollar's gained strength of late, we should expect that companies no longer have to caveat their earnings with chatter about how much a strong dollar has hurt earnings.
Oh, and don't worry if you think you have missed something. There are, as always, plenty of stocks going down on days when the averages are going higher. I see tons of dislocation in the tech sector even as that's going to be one I think could have a robust fourth quarter.
Suffice it to say that while it appears that hope seems squelched in real life, it springs eternal almost daily in the stock market and today's performance simply reflects that belief that things are getting better in the corporate world even as they seem so grim in the actual one.
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