We used to call it "the era of good feelings." No not the period after the War of 1812 where there was a sense of national purpose and we came together in an effort to get above politics. No, I am talking about this week of Thanksgiving and how the buyers pay up and the sellers seem to walk away. It's almost as if there is a selling ban, and it's a wonder to behold.
What's an era of good feelings? Let me rip some of them down so you know exactly what I mean.
Let's start with Apple (AAPL) . It's soaring. Why? I check the news. There's a half-dozen articles about how Apple's HomePod is way behind Amazon's machine. Plus there are articles about how the device is late for the holidays. It's a slow negative news day for the largest capitalization company on earth. So what's it doing? It's up huge. It's a sellers' strike.
How about Facebook (FB) . Let's see Buzzfeed has a negative piece about how Facebook may be kicked out of Russia. I see a piece about how Ten Cent is now bigger than Facebook. There 's nothing good.
Plus show friend Mark Cuban's got an important tweet about how Facebook and Alphabet (GOOGL) could be the big losers because of the scrutiny they might get from the government over concentration of power. "Their media advertising, content and distribution dominance will be a defense at trial. That could create bigger issues for them."
Boy is this a cogent point. You can see the lawyers for AT&T (T) challenging the Justice Department saying exactly that: the power of the big internet companies is so great that ATT needs to acquire Time Warner (TWX) just to stay in the race. It's a natural defense. And would Google be able to buy Time Warner if ATT couldn't. It's certainly an interesting question. Given the possible combination with Youtube that would be incredibly powerful. This isn't a fight about traditional media. This is a fight about all comers who might want to be in media, from Snap (SNAP) and Twitter (TWTR) to FANG. I could argue this might be the worst day for these two in a while. Both stocks are roaring as is Time Warner.
Or how about Campbell Soup (CPB) , which reported a hideous quarter with a tremendous drop off in sales and a sense that whatever they do is not enough. They missed top and bottom line by a mile.
Now this is really an indictment not just of Campbell's but also of the whole center of the supermarket, where the real weakness is. So what happens? Initially we get some horrendous pin action. General Mills (GIS) , perhaps the most akin to Campbell's, sees its stock get crushed down a couple of points. It's as if the news is a direct assault on the stock. But then what happens? The sellers dry up and the buyers come in. The stock of Kraft-Heinz KHZ, which has a very similar portfolio to Campbell's is going higher. That's amazing.
You know we have been highlighting Square (SQ) for ages because we like the payment processing business so much. That's propelled the stock mightily. But now because the company mentioned recently that it is going into the business of trading Bitcoin in order to help its customers, the stock's been non-stop higher. It's incredible, but people are so desperate to find any way to play Bitcoin that they seize on Square and they are buying and buying and there are no sellers at lower levels.
For months we have been reading that there will come a moment where supply will overwhelm demand when it comes to the basic building blocks of personal computers, DRAMs and Disk Drives. But in the Era of Good Feelings we suspend any critical faculties about whether these markets could tip into glut and the market takes up the stocks of DRAM and Flash maker Micron (MU) and Western Digital (WDC) which makes disk drives and flash memory devices, It's almost as if these worries, which have plagued these stocks for months, have just vanished. But nothing has happened. It's just the sellers are letting them lift and the buyers are reaching like mad. They continue to buy Marvell (MRVL) , which is making a takeover for Cavium (CAVM) which will lessen Marvell's reliance on disk drives and make it much more of an internet of things play. This is extraordinary behavior where the buyer's stock goes up a second day. We will have Marvell's CEO, Matt Murphy, on Mad Money later to talk about the combination but typically the acquirer's stock has some slippage given the need to issue a ton of shares to get the merger done. But the stock will not quit which means that the stock of Cavium won't quit either.
Cracker Barrel (CRBL) reports a revenue miss and the roadside food emporium's stock craters. It's brutal and it's an indictment on all fast food and quick serve dinner restaurant chains. So what happens? The stock of McDonald's (MCD) soars. Wendy's (WEN) rallies. Restaurant Brands (QSR) inches up. Yes, Darden (DRI) , a better analog, does get rocked and so does Chipotle (CMG) . But the fact is the group itself is unscathed. Again no real pin action.
We keep hearing that the transports are rolling over, perhaps because of the NAFTA talks and how they are going and what they will mean for cross border commerce. None of the old timers wants to buy the market if the transports are acting badly. Today, out of nowhere, buyers come rushing in for the rails on a tough backdrop and the stock of industry leader Norfolk Southern (NSC) is soaring.
Now the era doesn't extend uniformly. Even with oil creeping up there's plenty of resistance to owning anything in that complex. It's still for sale and the sellers aren't walking away.
A disappointing report from DSW (DSW) , the off-price shoe store and an inline number from Burlington Stores BURL helped bring down the off priced group and its suppliers like PVH (PVH) and Under Armour (UA) . But I bet the negatives are forgotten by Friday and the buyers come right back in.
And some stocks can't get out of their own way, still. I am so disappointed in the stock of Allergan (AGN) , owned by my charitable trust, because it can't even lift on a day when the sellers have dried up in so many names including the drug names.
General Electric's (GE) stock gets hit by a price target cut from John Inch at Deutsche Bank. The verbiage is brutal: "we remain surprised at GE's upbeat tone/pitch. Inch says that new CEO John Flanner is sticking with some of the fancy accounting measures that were used by his predecessor and that he seems somewhat oblivious to the collapse in both cash flow and profit that's swirling around the portfolio. It's a very negative piece and it has hurt the stock.
But the selling, again, has been limited to GE and nothing else as the other industrials remain hotbeds of buying.
And let me be clear, I am not saying there is no selling. If that's the case then there would be no market. I am saying that the sellers in many stocks have taken a stance of not laying on stocks or offering what we call any "size" supply. When you look at the book of what's above the current stock price you just don't see a lot for sale so if you want the stock you have to pay up to get big slugs which is what you are witnessing.
How long does the Era of Good Feeling last? It's usually a Thanksgiving phenomenon. That said with this market, who knows? Maybe investors have simply decided that they should pay more for the same earnings numbers, something called multiple expansion. I do know one thing: if you really are scared of the market, if you really believe there will be a crash or something terrible awaits us -- a view I do not subscribe to -- use this market to exit. It's a heck of a lot better to offer stock and be taken than to have to bang out bids into a downturn.
