Maybe it is time we took the pressure off ourselves. Whether it be the President's tweets, or federal reserve intransigence, the coming election, Brexit or every other irritant, I think we need to step back for a moment and recognize there's not really that much happening. In honor of my 45th high school reunion, let me invoke my great 8th grade biology teacher, Mr. Laurence, who always said, "Jim, don't sweat the program."
What makes me think of this is a rare break that I took from the market to our place in Italy, which has zero reception. After ruining so many family vacations, especially the last couple, what a joy that is.
More important, how enlightening it can be. In the time since I left, the S&P was pretty much unchanged while the Dow rallied a mighty 320 points. That would be a lot in the old days, when the market stood at 2600. It's meaningless now. In fact, I tell my team, "listen, if you divide every number by ten you will feel a lot less crazy about the volatility. A 32 point move on the Dow over five sessions isn't even noticeable on a short-term chart let alone a long-term one."
I didn't check email when I was away -- another rarity -- because the only place where you could get consistent email was in my daughter's bedroom -- and she's tougher on me about not doing work than my wife is.
So I waited, and spent all day yesterday going through email. Suffice it to say there were about 35 out of more than a thousand that were worth responding to and half of those were obligatory or related to tonight's show.
What earth shaking things did I miss? Most were concentrated in a couple of days last week. First, we got three blow-out quarters, Dollar Tree (DLTR) , Dollar General (DG) and Burlington Stores (BURL) -- all of which, frankly, were predictable if you simply read Matt Boss's stuff, the acknowledged retail ace from J.P. Morgan. Then we got a mystifying shortfall at Ulta Beauty (ULTA) -- which, judging by the reaction of the analysts, felt like a multiple version obituary.
We saw a relentless run in the semiconductors and the semi-equipment stocks, not because they reported good quarters, but because they reported weaker quarters and the analysts are simply trying to get ahead of the curve.
There's the usual and relentless declines in bond yields, as analysts here refuse to understand what investors over there get: We are the country that has the most ridiculously high short rates because the Fed doesn't understand how inflation works anymore and doesn't get that we can have much lower unemployment (AMZN) than we used to because its harder to find workers than it is to find jobs. Call it the Amazon effect. Or the FANG effect. Whatever. But it's happening undeniably and maybe we just need a younger Fed chief. Or one who tries to be younger, and I don't mean hair color for men. Short rates are too high for their own good, period, end of story.
Finally, there's the endless sturm and drang about tariffs and their impact which, despite all media jeremiads, hasn't meant much at all except to a couple of broadline retailers as the rest of the cohort's been incredibly strong. Funny, it's not the tariffs but the malls themselves that are at fault -- and reminding yourself of that will let you become a better investor. The suppliers, most of whom we don't care about because they aren't publicly traded, are being told by the big dogs -- as Target (TGT) just said -- to eat the increases anyway.
Oh and what happened to China and the U.S. when I was away? We heard that the President had two calls with China to restart trade. We heard the stories were lies. Today we are hearing they are on for next week. As I told you, all that matters is that there be some momentum, true or not, as the averages are showing you today.
I know that there are momentous moments in the market. They could be right around the corner. But can we just accept that now isn't one of them? That's what my week away proved to me and even a thousand Dow point decline -- remember that's 100 points in dog years -- won't amount to a hill of beans.
