Wait a second. Is it possible that everyone out there perceives that everything is a win? Is that how you get a huge rally based on things that would normally send the market lower or at least cause a pause among the bulls?
How can any other conclusion be reached on a day when stocks of all flavors and sizes rallied. It's remarkable to see such excitement based on totally contradictory theories and themes. It's a sign that investors are totally confused but are willing to put their money down anyway. It's like everyone's betting on their own point of view and almost all the bets are to win with no points included.
Let's start with the election. I want to put a positive spin on both sides, not because I can't make up my mind, but because the market can't make up its mind. If I hear back from you that these descriptions are derisive or divisive then you are missing the point as I am simply explaining and translating what the market is saying.
First, with the president's feeling better, the Republicans now believe they have winner on their hands, not unlike the shocking rise in popularity that greeted Boris Johnson when the U.K. Prime Minister left the hospital after a bout with covid. Why not? There Democrats may grouse that the president put many at risk when he took the SUV out for a spin last night or even when he went to the Bedminster fundraiser knowing that one of his operatives was sick.
But the Republicans can easily claim their 74 year old standard-bearer is tougher than nails. "Feeling very good," he tweeted this afternoon. "Don't be afraid of Covid. Don't let it dominate your life. We have developed under the Trump Administration some really great drugs and knowledge. I feel better than I did 20 years ago." He's Atlas, so strong that he can make a stimulus deal with the Democrats and be applauded as the man who saved us from having a second wave of lay-offs to go with the second wave of covid.
Vice President Biden, however, has been getting some solid polling numbers and somehow, the possibility of a grand sweep means a smooth transition because there could be a landslide. I know this is obviously quite a different hand from the one that the president holds, but remember, the pollsters screwed up the previous election, but this time the gulf is so wide as to be a coronation. Remember this is what the investors who are buying think, as they believe that the president is being fundamentally dishonest about much of his convalescence and can't believe he put so many people at risk, surely something that will sway the undecided into the Biden camp.
What's curious is why would anyone truly want a president who could be hostile to wealth and make people pay much higher taxes on stock sales. Plus, you know the corporate tax rate will go up which means fewer funds for buybacks and dividends.
Yet there seems to be a strange calm among the Democrats, with the stocks that would do best with a better relationship to China all marching together. It would be hard to have a worse relationship - or in my case, a view of a tougher relationship - and that's fantastic for all the semiconductors, a key leadership group.
A strong hand by Biden, may turn into a strong hand for Speaker Pelosi which means we will get the stimulus the economy - and the stock market - needs if it can keep going up. The anticipation of the stimulus was palpable all session as the talks continue.
Another theme? Because we now expect a stimulus deal rates are soaring. I know, bad for the housing stocks which did hit all time highs in the morning, but great for the banks which are about to report next week. If they can claim, in any way, shape or form, that things will get much better with higher rates and show that they are doing well with the stay at home execs and the newfound volatility and the record stock issuance, then the worst, make that the second worst, group would be buyable.
The worst group, the oils got a terrific boost from a possible stimulus and a potential strong-man who-favors-fossil- fuels-rap. With oil approaching $40 again, the oil stocks put on a terrific show. Please sell them.
When you think stimulus of course you think revamp of houses once more. Talk about a theme that won't quit. My favorites are endless winners like Best Buy (BBY) , Home Depot (HD) , Lowe's (LOW) , Walmart (WMT) , Target (TGT) and Costco (COST) . You can add, on any pullback, the stock of Bed Bath & Beyond (BBBY) . Stimulus means retail, never forget it.
When rates shoot higher, the highest they have gone since August by the way, you are supposed to sell your growth stocks.
Not in this market.
Biotech all trades together because of these ridiculous ETFs that lump all biotech into one basket. That means Regeneron (REGN) , which makes the antibody cocktail that the president took see its stock soar more than 30 points. That pretty much assured a gigantic move in a group that would normally wilt with this jump in rates. It didn't hurt that Bristol-Myers Squib (BMY) paid a huge premium for another biotech, Myocardia, $13 billion which sent the stock up 80 points. What reminded that we have stocks that could be worth much more than we thought and we will have Giovanni Caforio, the CEO of Bristol Myers Squib, in later on Mad Money.
This market has bell cows and the loudest may be Nvidia (NVDA) . The chip maker talked about new super computers and harnessing the power of them for drug development. You can't beat that theme in this environment.
Finally, there's the oddest theme at all: the turn, the V, the amazing rally in manufacturing that we are undergoing, the one that actually says the Republicans holding out against stimulus may have a point. Today we got some preliminary truck numbers that had my head spinning like Regan in the Exorcist: 31,000 units up 145% year over year and 60% month over month. The smaller trucks are almost as strong.
I am astonished that we could have such a strong economy especially when we know that there are tons of lay-offs like the people who work at 500 Regal Cinemas that are closing. But the hottest area of the economy right now may be the used car market as work at home former commuters eschew public transit or carpools. It's an astonishing bull market that encompasses the entire group from Carvana (CVNA) and CarMax (KMX) to AutoNation (AN) and Lithia (LAD) . My favorite? I am really warming up to Ford (F) which seems determined under Jim Farley to get out of all of the markets that are losing money and double down on the ones that are winning. I love the new electric 150 truck that will be out in 2022, but in the interim I am astonished at how the used F-150s are holding their value. I know the denizens of this stock are largely Robinhoodies who don't care about an axed dividend but I think they will be right.
It's not often that all roads lead higher. In fact it's as rare as a partial eclipse of the sun. Can't be total. Someone pulled the plug on the restaurant stocks and I didn't like the decline in the stock of Zoom (ZM) . It's like one of my favorite Sondheim saws: "Something familiar something peculiar something for every one to buy, Comedy Tonight!"