That's right, we are in a moment where there are more positives than negatives, more pluses than minuses, and it's all because some stocks are more powerful than others and the aberrations are to the downside. Not the upside.
There are plenty of downbeat stories out there. The slowing Chinese economy. The farce of Brexit. The continual tragedy that is the crash of two Boeing (BA) planes and the denouement at the company. The endless plaintiff wins or fears of them by major drug companies and their wholesalers. The overhang of the unicorns that grinds holders down with a relentlessness that could take your breath away. We can and will flesh all of those out.
But what matters most is the action of individual stocks, as they have no ideology, they are not, as they would say in the amazing British show Line of Duty, bent.
Let's start with Apple. Here's a company with a stock that is breaking out to all-time highs because among many things, lots of homework that shows its new phone, the 11, and all of its iterations, is selling much better than Wall Street anticipated.
At the same time, the CEO, Tim Cook, has been able to navigate both side of the trade war, spending time with the leadership of both countries. He gave the commencement speeches at Tulane and Stanford this year. He just joined the board of the prestigious Tsinghua University of Economics and Management. Last week he spoke to China's State Administration for Market Regulation where Reuters reports he spoke about expanding investment in China, consumer rights protection and corporate responsibility.
Cook's not waiting for trade talks to be resolved. He's at the front lines of them. Apple has lots of semiconductor pin action, everything from Cirrus (CRUS) , and Texas Instruments (TXN) , to Broadcom (AVGO) and Skyworks (SWKS) . Rallies in these stocks can trigger a dramatic increase in the entire NASDAQ.
It's a mammoth breakout that silences the macro junkies who just blather on and on about the Fed, the fading inverted yield curve and the big slowdown that's hard to find if you are examining most domestic companies.
Speaking of domestic companies, how about the amazing breakout in the stock of JP Morgan? It's hard to imagine that the highest quality stock in a huge swath of the S&P 500 could still sell at 12 times earnings and yield almost 3%, but that's the case with this jewel of an equity.
You are not going to have a bank rally without JP Morgan. It's the best of the best. That's why it's 2% breakout is the locomotive that's pulling the stocks of Citigroup (C) , Bank of America (BAC) and Morgan Stanley (MS) .
Again, if we hang back with the macro negativists we couldn't possibly accept this move. It would be impossible to occur. There have been so many big time money managers who have been calling for the end of the world, that this group has been on tenterhooks. It didn't matter that there is consistent mid-single digit growth here. It doesn't matter that they are serial buyback and dividend boosters. It doesn't even matter that I can recall when credit was any better than it is. The consumer's in amazing shape.
These details, like the details of Apple's strength, just get overlooked in the general jeremiads we hear spewed by even the best or lets say, most legendary, of managers.
What matters, what counts, what's salient is that the rally is occurring because there's tremendous leadership in the form of JP Morgan and the welcome comments of CEO Jamie Dimon.
Or how about the rally in the stock of American Express. A lot of times I like to read the conference calls of companies without knowing where their stocks might be trading. It's a great discipline because it keeps you from being a herd follower.
I thought the call was a solid one, good growth, tremendous millennial pick up, one of those quarters that told me, again that ever since Steve Squeri took control of the company, it's become a must own fintech like Visa (V) and Mastercard (MA) , which report October 24th and 29th, respectively.
Or how about Honeywell? If you told me there's a company that's levered to aerospace, climate controls, chemicals and automation, I would say that it's exactly where you don't want to be. Yet, CEO Darius Adamczyk put on a clinic last week when he talked about how strong business around the globe is, including China. The growth in aerospace was phenomenal but the rest of the company's divisions shone, too. Oddly, the only weak business line was its segment that participates in warehouse automation. The market accepted it because the division had been off the charts last year at this time.
Finally, there's Union Pacific. I know that for some, this one was a disappointment with so many business lines revised downward or thought to be weaker in the future. I looked at it exactly the opposite. I kept thinking if this railroad can make these bountiful profits - profits that were equal or exceeded by rival (CSX) earlier in the week - then what happens if things get better? What happens if we get a trade resolution? What if the Fed keeps cutting rates? That would produce some extraordinary returns. No wonder Union Pacific's stock led a rally in the entire transports group including Norfolk Southern (NSC) which reports Wednesday.
This afternoon I was on Scott Wapner's fabulous Halftime show and we had a spirited discussion led by my good friend Josh Brown who pointed out that stocks have been able to rally despite all sorts of obstacles, yet the pessimism is unrelenting. I suggested that perhaps the macro people had too much sway and they seem oblivious to actual investing. The concept of trying to make money eludes them and that might very well be because they do not share my view of hate him or like him, Trump's presided over a pretty halcyon time for equities all things considered. I pondered whether they just hate him and that keeps them from seeing what's happening. It keeps them from helping people make money. If we could invest in the macro folks, I think I'd short them for their lack of rigor or objectivity.
So, if you bowl, you know what pin action is. I see a lot of spares and a couple of strikes in my lane.
How about yours?