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We take it for granted, the relationship between the United States and the European Union, the one that produces $1.7 trillion worth of goods and services. We take it for granted because of something that happened back on Dec. 11, 1941, when Adolf Hitler declared war on the U.S., and on June 5, 1947, when we announced the Marshall Plan to help rebuild war-torn Europe after the horrors of World War II. What’s incredible is not that we have a president who is willing to challenge the friendship between the U.S and Europe, but that the partnership has lasted so long and almost no one is alive of any consequence who saw either event or understood their significance at the time. President Donald Trump on Sunday agreeing to an extension on the 50% tariff deadline on the European Union until July 9 is likely why the futures are up so much Sunday night. Dow futures added 407 points, or 1%, while the S & P 500 futures climbed 1.1% and Nasdaq 100 futures rose 1.3%. In a very short period of time, Trump had decided to go back in time to roughly 100 years ago when Europe meant nothing to us other than rapacious capitalists and communists all out to get us and drag us in to their nefarious ways. We were beginning to feel the tug of a level of isolation that would only grow in time until 1936 when the troubles in Germany were too late for the Democratic Party to ignore. The Republicans ignored it pretty much until Dec. 7, 1941, when the Japanese attacked the U.S. naval base at Pearl Harbor in Hawaii. Enough history: The point of today should be a simple one. The Europeans are showing grace under pressure — something that we had pretty much given up on in this tariff war — at the exact same time that the president has become aware of how awful Russian President Vladimir Putin is and how much the Europeans may need us if he gets totally out of hand. It’s a welcome sign. Now throughout this period, ever since Liberation Day on April 2, we have rarely seen the futures up the night before trading. It’s almost always been a lower opening and then a downward spiral. Suddenly, though, there is a confluence of intriguing points: The U.S. House of Representatives passed a bill that, if the chatter is to be believed, will see resistance in the Senate but that resistance will be about some combination of spending cuts and tax increases. I wonder if the Senate can really live with the huge tax breaks that the wealthy, perhaps the least deserving, will get with the House bill. The EU wants to fast-track trade which at least makes it so we can get rid of these absurd deadlines and blow-ups with jackboot increases on rates if they don’t come to the table. The Japanese will now feel the pressure to do something serious, too. There could actually be momentum. Trump sees he was in bed with the wrong team in Russia and there could actually be a reason why the Europeans might want to do a deal beyond trade. Nvidia reports this week and for once the expectations are actually low. All of these, plus the S & P Oscillator is at 0.97%, the lowest it has been in ages, making it a much lower risk moment, especially if the 10-year Treasury continues to hug 4.5%. (Anything above a plus 4% on the oscillator indicates the market is overbought, while anything below a minus 4% indicates the market is oversold.) It’s enough, for once, to make me feel that we do not have enough on. That we have not bought enough, the only thing picked up of late being some Capital One on Friday. I wish we had bought more. When was the last time you have heard anyone say or write that? We just had a Club monthly meeting last Wednesday and I told you what I like and what I am worried about. All that has happened since then is that Apple has gone down every day. I can’t tell you that it has changed my mind. It is not at a level that I want to pick at. But Capital One should be bought tomorrow. It’s too low. The selling in off-price retailer TJX is way overdone. It actually had a very good quarter . If you read the conference call you would think it should be at $135 not $125. I have tremendous conviction that it’s the right price to buy. Same goes for Goldman Sachs . We are headed into the summer so I can’t expect to see a lot of IPOs. But my M & A sources say there are a lot of deals about to occur. I wish I could say to buy GE Vernova , but I fear its parabolic arc. It’s been a moon shoot. It has to come down. I like Disney plenty and it can still be bought here, as I said at Wednesday’s meeting. Home Depot makes some sense, but the weather did not cooperate around the country. Planting season is in full swing and there’s not much good to say about it. I fear number cuts. Let’s see what the day brings us. That should do it. I am not going to recommend buying anything up in price. No need. Our president, who now seems more focused on bitcoin than stocks, will give us a better chance than we are going to get with an up opening. Remember we are back in the days of the Walmart White House: The president gives us lower stock prices every day. I don’t think even the peace offering from the EU will change that now. But maybe we can shrug off the president for just one moment. Now wouldn’t that be something? (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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. 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American President Donald Trump seen in between the flags of the U.S. and the European Union.
Didier Lebrun | Photonews | Getty Images
We take it for granted, the relationship between the United States and the European Union, the one that produces $1.7 trillion worth of goods and services.
