It was an odd session in which we saw stocks move higher even though Spain and Italy watched their markets plunge, and several big companies posted disappointing results including UPS. Those results did underscore the notion the US economy is doing better while the global economy is slowing. From a micro level that's important, although longer term trends clearly favor the rest of the globe. The good news is we continue to be reminded this is a dynamic economy that has withstood a barrage of attacks from the most powerful office in the world. The sad news is we could be rocking so much more. We actually could use this lull in the global economy to lengthen our lead.
Yesterday UPS missed the street, but it wasn't because of America.
But yesterday wasn't about corporate earnings (of the 45 S&P companies that posted results 18 or 40% missed) or the United States economy but further fleshing out of a consensus on where the Federal Reserve stands. It's not overwhelming but the street is leaning toward a conventional wisdom Bernanke is not done weaving his magic. Hence, a bigger move yesterday than the Apple led rebound on Tuesday. It's why gold edged higher, too. Still, this market rally has been stealthy from the very beginning and continues to be the least talked about rally in my professional career.
Here's the rub-I like it!
Part of me is sad so many Americans have given up on the stock market and the notion of ownership. I'm the pied piper of ownership-don't give up on it! Own a house, own land, own gold; own a business including the biggest and best in the world through the stock market. Hey, don't get me wrong, our cash levels have been elevated for more than a month. But, we are offering new ideas and we are going to make money in the stock market. Back to being excited that so many are missing the market; at some point, they all come back in. I plan to have positions up huge when the Dow hits 14,000 because I think the masses will break open the flood gates.
This is the nature of human beings and all their emotions. Of course, there are valid reasons to be concerned and frustrated and angry but things could get better in November.
The Pros Sulking Too
Not only have novice or retail investors missed this remarkable rally, the pros have been too skeptical for too long and are getting more bearish.
And CEOs are talking Smack
I really think Caterpillar's CEO played it too close to the vest with his cautious comments on China and Brazil. Yesterday, FT said Brazil's wealth will double in eleven years—that is the stuff of legends, and we should hear the footsteps, but companies like Caterpillar should be hearing the cash register. I found a CEO yesterday that isn't afraid to talk smack and take on rumor-mongers. Titan International (TWI) posted results that included record margins and earnings per share. But that wasn't enough for their CEO, Maurice Taylor, who wanted the world to know he's rocking, and he ain't scared—even taking on the bloggers.
"The order book is filled for the year and we must keep increasing our output."
"Farming, construction and earthmoving and mining are all very strong and we expect 2012 to be another year of growth."
"The dynamics in agriculture are changing around the world and are positively impacting the demand for machinery in the industry. Prices for metals, oil and gas prices in the Earthmoving and Mining markets are expected to remain at attractive levels to support strong demand."
"In this past quarter there were some bloggers who were concerned over inventory and the auto supply industry. Titan International is not in the auto supply business, but we are in the OTR tire and wheel business. Titan builds to order."
"Titan's mining service business is a hot market."
"We have just opened a facility in the oil sands in Canada and already are receiving the demand to double the facility."
But Worries are real
The biggest worry is the November elections, make no mistake. The second biggest worry is Americans giving up on this country. The lack of optimism is deafening. Sadly, the less you believe the more the anarchists and collectivists win. It's what they're peddling by the bucket-load. America needs a psychological wakeup call but its skeletal structure is in good shape after a couple of centuries of success. I am worried, although I actually feel better about the elections in recent days. In the meantime, there has to be vigilance against all the bald-faced power grabs and attempts to usurp rights.
I'm also worried about a date with inflation, or I should say runaway inflation. That could be avoided with the November election, but if not, the seeds are already in place. This should actually give you a greater sense of urgency to make a difference. But, I have to underscore giving up on the American Dream by checking out brings your worst fears closer to reality.
Don't Mess with the Heartland
I was in the middle of an interview on Payne Nation with Congressman Cynthia Lummis of Wyoming who has been fighting back on an assortment of proposals and new rules against the American heartland she calls "absurd" when news broke the White House threw in the towel on its proposal to kick kids off the farm. The decision to withdraw the rule was made in response to thousands of comments expressing concerns about the effect of the proposed rules on small family-owned farms.
The release from the Department of Labor had a very interesting line: "To be clear, this regulation will not be pursued for the duration of the Obama administration."
Chalk up one for the little people with the same spirit as those that fought for independence against a greedy king. I must say there was an avalanche of replies on this from yesterday's question of the day. Stuart Varney from Fox Business pushed this harder than anyone on television, too, and should take a bow.
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