Michael Huber 
After all of these years, after all of the rather incredible rallies and gains in the stock market from so many groups, the typical morning still starts with a bevy of negativity. That gloom lasts until near the close, where the market seems to say, “Oh well, maybe things aren’t that bad, at least for now.” And the selling stops with an hour or two to go before the closing bell. It’s astonishing that incredibly important people fret every day about things the Federal Reserve has done wrong or that the presidential candidates are doing wrong, or that our allies are doing wrong. But you don’t hear a lot about what companies are doing wrong, and we trade in companies — not invectives or 25- or 50-basis-point units. The environment is so good for companies, yet we somehow want to muck it up by endlessly talking about the Fed. I don’t mind. I know I am always on the hunt for ideas. However, I do find it distracting to the point that I think those who dwell on the Fed have truly lost their way or are standing in their own way. They aren’t helpful, and it’s very easy to opine because you don’t need to do anything but carp or praise. Genuine homework is a drag. It’s so much easier to posit what you think the Fed will do than it is to decide Amazon might be done going down or that Micron’s quarter was truly better than expected or that Walmart can still go higher. Those decisions require homework, especially if you aren’t going to change your mind about them tomorrow. The fabulous session Friday — despite a September jobs number that derails the narrative that the Fed needs to make another jumbo cut at its November meeting — is a reminder that the slower the central bank moves, the better. The Fed-centric people don’t seem to realize how good this moment is. Once the Fed decides it’s time to lower interest rates, you want measured, methodical rate cuts. Nothing harsh. Nothing exciting. The longer and more drawn out, the better. In that sense, Friday’s strong employment number is a godsend. The U.S. economy is based on services, and we want consumer attitudes to stay robust as the Fed brings borrowing costs down to a more reasonable level. Adding 254,000 jobs in September should help with that. Why does the market go higher in the face of all of negativity? The first reason is supply. Remarkably, with a rate-cut cycle in full swing and so many investors back from summer vacations, there is just not a lot of new supply coming online. We hear about OpenAI and its brilliant $167 billion valuation , but we don’t see any stock available to public-market investors. We know Elon Musk is being more politically active , but he’s not offering us any stock in SpaceX subsidiary Starlink, the satellite internet service that so many of us love. Meanwhile, the buybacks continue at an insane pace. They will drop off as we enter third-quarter earnings season, but demand is just much stronger than supply. Supply isn’t talked about much, but when my “Squawk on the Street” co-host Carl Quintanilla talks about the newly public companies that are ringing the opening bell, I am conscious that there’s nothing of substance, except for the occasional — and excellent — spin-off . Supply, I have found, is the single most indicative issue when it comes to the direction of the market. And right now, we just don’t have enough to go around. Every bit of money that comes out of the declining money-market funds and expiring U.S. government bonds seems to make its way into equities, whether they be small-cap stocks, midcaps — the new favorite — or the S & P 500 . Again, that’s a function of spare money not finding supply until stocks go higher. If there are stocks that aren’t participating, we have a second spur: analysts upgrades. Think about it, the conversation is positive on almost everything with the exception of Nike , Walgreens , CVS Health , the cable companies (sigh), and maybe Etsy . I am not kidding. When you look at the vast panoply of stocks, you just don’t find a lot worth hating. That wasn’t the case a few weeks ago before sentiment on China turned around — and that’s our third positive. We don’t seem to realize how big that has been. China had been the Achilles’ heel of this market for many firms — apparel companies; medical companies including Club holding GE Healthcare ; consumer packaged goods companies; and casino companies such as former Club name Wynn Resorts . They were all in the spiraling-down process, with analyst after analyst piling on to cut numbers. We lost that cohort of negativity when the Chinese Communist Party, faced with a downsizing in the MSCI index , decided to go out all out with a host of stimulus measures. That is something I didn’t anticipate despite endless prompting from one of my best mentors, hedge fund manager David Tepper, who was even sending me GIFs and social-media posts about “BABA black sheep,” a reference to Alibaba’s stock ticker. I have been furious at myself for thinking the Chinese government couldn’t do anything about the country’s struggling stock market. I forgot the cardinal rule: The market there has absolutely nothing to do with the fundamentals. Sure, e-commerce and cloud giant Alibaba has actual fundamentals, including huge amounts of cash, but everything else that is going up is pretty phony. BABA 3M mountain Alibaba’s stock performance over the past three months. The money that seems to be going into China is an amalgam of international funds that are underweight China and now are afraid of missing the upside, along with former tech money and DraftKings money — my definition of gambling. The Chinese stock market has been rallying nicely since the stimulus announcements. But one day, not necessarily soon, the Chinese will run out of fire power. The best thing about the newfound positivity on China is it has halted the remaining analyst downgrades and price target cuts for U.S. stocks with heavy exposure to the country. One of the last ones to turn positive will be Apple because the Chinese overhang has been tremendous. Soon you will hear the Chinese consumer is on better footing and that means she is purchasing an iPhone, helping to elongate the buying cycle. While it hasn’t happened yet, it seems like an eventuality. It’s incredible how bullish this Chinese spur is — and yet we tend to limit the talking of it to Alibaba, Chinese electric vehicle makers, PDD Holdings , JD.com , Baidu , and some Chinese players to be named later. The positive wave hasn’t even hit our shores yet. Given that China was the biggest negative in the world, to have it so surgically removed is quite extraordinary. I find it somewhat ludicrous that we spend so much time questioning the Fed and little time discussing these incredible positives. I say ludicrous because we act like stocks are down huge from their highs. In reality, despite working off the overbought condition that we had been in, we didn’t fall hard to start October. The S & P 500 ended Friday’s session a mere 0.2% from its all-time closing high on Sept. 30. Of course, there are pockets of weakness. We saw the homebuilders get clocked Friday. But you know there will be a half-dozen analysts coming on the hoot and holler Monday saying buy them. The housing-related stocks that had been so special will soon enough be special again. Sure, we had a surge in oil last week, but it caused few stocks to go down and lots of stocks to go higher, including laggards like growth-oriented oil play Diamondback Energy and staid oil play Exxon Mobil . At one point, they would have led to a zero-sum advance. Instead, they just go up now, too. So why isn’t this all too much? Why isn’t it just too Panglossian? That’s actually an easy question. Set your alarm for 3:30 am ET and watch how negative U.S. stock futures are around that time. We have a ground hog-like bear who seems to magically appear as the sun rises. The bear comes with all the trappings of the intelligentsia saying critical things. Or hedge-fund billionaires shouting about how everything is so miserable. These brilliant critics make everyone nervous because they have the microphone and make good headlines. Negative stories keep the bull market from surfacing in the media but not among the buyers themselves. They have no choice but to find things to buy. The worst that happens is they pick an index —any index — and buy that one. And yet the only people who don’t seem to have remarkable for hatred for this market are the buyers. Then again, that’s all who really matters. (Jim Cramer’s Charitable Trust is long AAPL and GEHC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
After all of these years, after all of the rather incredible rallies and gains in the stock market from so many groups, the typical morning still starts with a bevy of negativity. That gloom lasts until near the close, where the market seems to say, “Oh well, maybe things aren’t that bad, at least for now.” And the selling stops with an hour or two to go before the closing bell.
