All eyes seemed to be on the potential Government shutdown today, but then the market continued its rally as if it just really didn’t matter. Who knows what will happen. It appears that Congress will pass another stop gap Continuing Resolution, kicking the can another 30 days down the road. The real stink of this Government shutdown is that all lower level Government workers lose their pay checks but our Congressmen and Senators keep getting paid. They made the la. No big surprise here.
Cramer thinks the market’s rally is due to the fact that many people just don’t want to miss out as they have been on the side lines missing most of, if not all of this rally. “It’s kind of like a bunch of Godzillas, unleashed all at once, trying to beat each other over the head to get some stock in, as much as possible,” said Cramer. “As hedge funds and money managers race to get their orders complete, it’s enough to move the needle. “It’s a crazy case of FOMO — fear of missing out — on the next big move, even as these buyers are creating that move with their own massive footprint,” said Cramer. “It’s really indicative of a shortage of stock. So many shares of so many companies have been retired, bought back and crunched. So many existing shareholders are owning, no longer renting, their stocks, that portfolio managers have no choice but to drive up prices dramatically with their own buying,” concluded Cramer.
All of this is very true. Cramer just does not want to give any credit to the Tax Cut Bill. Make no mistakes, the Tax Cut Bill was huge for corporations and the market.
What we have in this market is something we haven’t seen in many years, a perfect storm. We have a very strong and growing economy, full employment, low interest rates, a consuming public, a very positive environment for business, deregulation, wages increasing, reasonable oil prices, a frenzied buying of stock, cash on the side lines ready to be deployed, a shortage of stock, Short sellers getting whacked and forced to buy to cover their short positions, earnings expansion. There just isn’t a lot out there not to like in this market.
Sure there are concerns but they are exactly the same concerns we had last year, North Korea, China slowing down, The FED being over aggressive in rate hikes.
I believe you must take full advantage of these situations when they occur. Because they just don’t come around that often. We will stay fully invested and keep a diligent watch on anything that may derail this rally.
Your Boring Money Manager,
We manage risks first
Then we buy quality
And only then do we seek to provide a reasonable return
At the time of this writing:
Dow Jones 26,071.72; S&P 500 2,2,810.30; Ten Year Treasury Yield 2.411%; Oil $63.36/bbl.
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Sources: The Capital Group. Zacks, Seeking Alpha, CNBC, CNBC guest and contributors, Jim Cramer, Wall Street Journal, Investor’s Business Daily, and Financial Times. Special thanks to Wikipedia and MarketWatch for historical facts. If I have inadvertently missed any other sources please accept my apologies. No assurance can be made that profits will be achieved or that substantial losses will not be incurred in connection with any investment. All investments involve varying degrees of risk including loss of capital. This information should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation of any individual investment or strategy. PAST PERFORMANCE IS NO GUARR ANTEE OR INDICATION OF FUTURE RESULTS