Bin Laden, China news good for country, stocks
The death of the terrorist mastermind is a plus for the US and the world, while China's manufacturing slowdown means good things for stocks.
The short term is different from the real short term, which is different from the real real short term. The short term is also different from the near term and the long term. All have been on display in the last 12 hours.
That's how I look at this Osama bin Laden news. As you may have seen, when the special press conference story was about to happen last night, the S&P 500 ($INX) futures were up a couple of points. The extreme mystery of the "national security event," which is all we knew at 10:30 p.m. ET, didn't budge them down -- and that was pretty accurate, somehow, given that you had to believe the news could have been bad or good.
Then those futures flew up a quick 9 the moment the real news broke but before the speech occurred, and they landed at 11 points up. That's the real short-term impact, the anticipation of a euphoria rally driven by retail investors entering the market with a feel-good vengeance.
Then, overnight, when it was pretty clear that getting Osama meant that the war on terror was doing better than we thought, oil got hammered. People figured that if we could get Osama, we could get Gaddafi, which meant that oil had to retreat a couple of bucks in anticipation of that regime's collapse and a restoration of oil flow.
Talk about a real real short term -- the notion that a decline in oil would mean a decline in the S&P 500 as well, because oil is the driver for the index. So now the futures are just a point above where they were before the news broke! We've gone a full news cycle.
Near term, though, I believe the market should actually be rallying, because the most substantive news I have seen is out of China: Manufacturing, at last, has slowed in that country. This means the most important central bank in the world when it comes to the international industrials -- the real driver of this market -- can soon stop tightening. It's a huge move.
What about the long term? A loss for Osama is a win for Obama, so those buying have to recognize and make peace with the idea of a second term for this president whom so many capitalists hate because of his perceived anti-business stance. Lately, though, I've got another take: If the reaction to his "anti-business stance" is a market that goes up regularly . . . forgive me, but I will take it. Not all of the good that's happening can land at the feet of Ben Bernanke.
So take it all into account and what do you get? You have a market that pretty much does nothing and reverts to its true natural colors. If oil futures go down, stocks go down, until proved otherwise. In other words, the market is still hung up on this one ridiculous proposition -- yet each time, it comes to its senses around midday as oil stabilizes and the market reverts to earnings-based moves.
You have to admit that this compression of news cycles leads to pure idiocy and inanity. But, in the end, the most important piece of data is the one on China -- and it is positive. So let the market sell off on oil, but back the near-term news -- which is China -- and pick stocks up if they get hammered.
Who knows? By the end of the day, maybe someone will remember that we just killed bin Laden, the evil mastermind of terror, and that this is good for the country and the world!
Follow Cramer's trades for his Charitable Trust.
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