Nothing's more excited than the catch-up trade. The airlines are amazing, they won't quit. Same with the cruise ships and the hotels. Nothing but love, endless love.
Earnings? Who cares? Bother me later.
Same with the casinos. Who can resist now that they are open? Oils? Why not? Oil's up $77 from that bizarre bottom. Lotta bargains. And there's Boeing (BA) , a pure double off the dark days. The biggest contributor to the run in the Dow on Monday.
The stocks of all of these businesses are so low, even after this run, that you can understand why people can't resist -- especially given that we have no earnings reports any time soon to spoil the party. That said, while they are baubles that are reached for every day, even before the market opens -- yes, the buyers are that rabid -- they are not responsible for the historic run we have seen from the Nasdaq, the ones that have taken it to an all-time high, something that's quite different from an airline tacking on a few points or a cruise ships coming back from the Covid-19 disaster.
So let's look at what's responsible for the incredible rally in the Nasdaq, because it's much more indicative of what's really going on in this market than the endless run in hospitality and travel based on the opening of America.
First, is Apple (AAPL) , with a stock that's up 12.38%. What happened here? I hate to say I told you so, but once again, in the middle of March, analysts fretted that Apple's best years were behind it and you would be buying at a time when China would be off limits, because of the president and the U.S. would be disappointing because of the recession. Plus, the gap to 5G is considered too far.
So how did it rally? Simple: the service revenue. When people stay at home and have nothing to do they tend to go to Amazon (AMZN) and the Apple store. We found out recently from the most seer-like of the Apple analysts, Morgan Stanley's Katy Huberty, that the Apple services revenue has had a dramatic spike. I also like that Apple Pay's contactless technology has become a necessity in an era when you don't want to touch cash, when you can't stand that anyone takes your card, and when the keypad has to be the least sanitary area you could ever touch.
Perhaps best of all, the work at home movement forced a lot of I.T. professionals to accept Apple, which tends to be what people use at their home even as Hewlett Packard (HPE) has some nifty models. But Apple has a phone and the Apple laptop is good for zooming. The bias that IT has shown, make that the tyranny against Apple is over; the pandemic ended it.
Next up is Microsoft (MSFT) and as much as I think that the stay-at-home move did benefit Microsoft, Apple gains not withstanding, Microsoft's Azure cloud business has been a standout in a period where cloud use has exploded. The company has had a remarkable run and it's all based on flawless execution. Satya Nadella talked about how the pandemic advanced digitization at a much faster pace than anyone thought possible. He's so right in so many ways: creativity, cyber security, cyber store fronts, in the absence of closed brick and mortar businesses, it all happened so quickly.
No. 3: Amazon. We are now starting to hear $3,000 price targets for this $2,500 stock and I find them totally believable. Amazon Web Services may not grow like it used to, but that's because of the law of supremely large numbers. What really mattered, though? The stay-at-home family loves Amazon. And once you are hooked, you aren't going back to the mall. After every storm, after every flood, after every blizzard, Amazon has picked up new members. The pandemic's probably the greatest single driver of traffic, ever.
How did Facebook (FB) get to be No. 4? Simple. Its orientation. Facebook has switched from a company pummeled by the media into a company loved by its small- to medium-sized customers. With the innovation of Facebook shops, Facebook might have done more to advance the ball than any publicly traded outfit. It's a natural to convert users and stop the endless focus on politics. I think the firm has learned a lot, but still doesn't know how to deflect. That's because CEO Mark Zuckerberg has to pay more attention to his business customers. If I were him, I would immediately develop a $100 million grant program for minorities who are often in suboptimal internet areas and need more than just a handbook to get rolling. This effort makes so much sense and would be so great to show who matters and why.
Five's an odd one, Alphabet (GOOGL) . It did report a better quarter, but beyond that the only things that I can point to are continued success with YouTube and a reinvigorated cloud business under Thomas Kurian, who has vowed to close the race with Amazon and Microsoft and has won a lot of very big contracts. But do not forget that the total addressable market doesn't ever quit.
You want to know what a blow-out quarter looked like? Check out the one that No. 6, Nvidia, (NVDA) delivered. You could argue that it's the quarter you would have expected to happen two quarters from now. Every line item was up, except self-driving car chips, which are doing OK. It's really about speed: Jensen Huang's chip architecture is putting the old Intel (INTC) architecture to shame. Speed, artificial intelligence, inferencing, it's all there. I was a little worried, because the stock galloped into the quarter. It didn't matter.
Famed investor Ron Baron will be on Squawk and he's been crowing about Tesla (TSLA) forever. He may take it to $1,000 himself. The fact is that the company's got a plant in Shanghai, which will produce as many cars as it can, one on the way in Germany and his full-bore California business. I know I periodically hear about discounting or worries about demand. I don't believe them. I am with Baron, presuming he hasn't changed his mind, which is highly unlikely
Paypal (PYPL) -- No. 9 -- has taken the year by storm as the most convenient way to pay everywhere. Whether it be Honey, the millennials' way to save on shopping, or Venmo, or plain out payments there seemingly is no way to stop this juggernaut.
I think Intel got on this list because it was cheap and just sold a lot of chips to a bunch of processor companies. I also think it got here because of the flood of index money that came in. Brutal judgment, but I haven't seen good numbers here.
The 10th is Cisco (CSCO) and I have to admit, I didn't see the big upside surprise coming, a surprise that was supercharged by Webex, its enterprise Zoom system. I didn't see this coming. It didn't hurt that the execution was preserved.
What do we learn from all of these? How about old dogs can pivot to new tricks? Or how about the staying power of the great names during the pandemic? No, it's not Hertz (HTZ) , going from $2 to $5 even as the debt picture is horrendous. It's not Nikola (NKLA) exploding higher as I said it can do. It's not the belief that America's now open for business after that employment number from Friday.
It's just the power of FAANG and friends -- something I have said you cannot depart from and if you wanted to catch the bottom, you owned these, not traded the cruises and the airlines and everything else that's still fair game until it isn't.