One thing everyone agreed on wherever I went this glorious Thanksgiving weekend: The Trump rally can't last.
But the other thing they couldn't agree on: what would cause it to end.
Oh, you heard people say "maybe his appointments will bring things down." Or maybe his trade policy could begin to impact our trading partners. Or that the media won't let up on him and the nascent recount story might hold up. Or that the dollar's too strong and his meddling in the affairs at the United Technologies (UTX) Carrier plant is just the beginning of how he will interfere with business.
But I heard nothing that stuck and is going to repeal the rally tight now. Nothing that said "you are right, it's going to be the changes in tax policy or the defeats he will suffer in Congress, or the problems with the debt ceiling or the notion of gridlock," all of the things that kept Obama from getting anything done at all.
On the other side, we have a host of positives that can and do seem to be playing out, something worth thinking about on what looks like a pretty soggy day.
First, Trump just isn't gaffing the joint up. There may be some picks that people feel are odd ball, but nothing that seems like we are really in trouble. The people who meet Trump in business, the ones who have swung by, are almost all people whom I have seen on CNBC multiple times. Most of them are beyond savvy about the stock market, much more than anyone who surrounded Obama.
We are talking household names. People whom we listen to and want to buy the stocks they like. Far from being kooks or goofballs, they are level-headed business people who, for the most part, are well aware of the implications of policy on the market. The only issue would be if companies genuinely stop offshoring and people begin to worry about how much cost cuts will cease.
But it's worth thinking about what kind of growth we could get if everything proceeds as planned on the tax cuts and the spending plans, especially if Trump will reward American companies like Deere (DE) and Caterpillar (CAT) with big infrastructure contracts, rather than give them up to the Koreans and the Japanese.
Second, it's cold. Right on time, it is cold. That matters tremendously for retail. The promotions we always hear about often involve the heavier, more expensive stuff. But one look at the way that Columbia Sportswear (COLM) and VF Corp (VFC) are trading, as well as the action in the department stores that carry these goods, tells you the set-up may be better than we think.
The natural gas companies need the cold, too, as storage has gotten way too high. Discounting of natural gas means less coal, less coal means a curtailing of the fantastic railroad rally. There's a lot riding on the thermometer, especially if OPEC doesn't come through.
Third: momentum. When you get a head of steam like this going into the last month of the year, you end up with a rally that will gain, not lose fuel, as money managers won't want to look as negative as they may sound when they are off the desk. I wonder if there won't be catch-up rotation toward some of the packaged goods stocks if the Fed makes a muted statement when, or if, it raises rates in December. That could cause the bank stocks to stall out -- they are really extended, but it might put a bid underneath the Clorox (CLX) and Kimberly Clark (KMB) kinds of names.
Finally, I really think that as the year winds down we are still not done with mergers. We see so many stocks that are acting great that tell you that the takeover environment is improving -- or at least the deals get done.
Take a look at the price of Rite Aid (RAD) . That deal was going to be killed under Clinton, for certain. Now it looks like it's going to get done. These telcos act too great for me to believe that something might not be going on. The action in the semiconductors is pretty insane, insanely rumor-mongered.
There's just too much smoke. There will be fire.
Of course we're overbought. We've got way too many bulls on the Investors Intelligence Poll. We don't know how some key appointments are going to go down. But we can say that, as despised and as long in the tooth this rally's going, it does, seasonally, have an awful lot going for it.