Inflation or ingenuity? Price increases or performance?
Most of the time we don't care, but today the Fed met and, so far, it's willing to ignore inflation and price increases and allow us to believe that stocks have been rallying because of earnings growth and the brainpower required to create it.
We have a debate raging between those who think that the reason why we are going up is because of liquidity -- so much money sloshing around that the stock market can't really go down -- and those who think it's because there are so many attractive opportunities vs. owning cash. Wednesday they converged and cash is still pawn and stocks are king.
Actually in this session, they are more like bishop, or even knight, because the king would produce better stock results from the sales and profits we are getting. We simply aren't getting the pin action right now for most stocks after the companies report, because after the miraculous stock market-wide move that we have had, everything seems like a bit of a yawn.
An AMD (AMD) can report an incredible number and it puts people to sleep. The banks banged it out, and they've done nothing. The consumer product stocks can't sustain anything. Unless your company is a huge beneficiary of the great reopening, then you simply don't matter. On to the next.
Right now the winners are getting obvious: Those who can put through price increases without having to pay more to do it. If you are an inflation taker, though, institutional buyers want your stock down before they buy. And that's what is happening.
We await Ford (F) and Facebook (FB) and Apple (AAPL) to see the reaction, but except for Alphabet (GOOGL) , on Wednesday, at least, when you look at the poor showing from like longer-term winners like Microsoft (MSFT) , AMD and Starbucks (SBUX) , so far, so bad.