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Everything rallies! Here's why bulls and bears are both right

Everything rallied: stocks, bonds, gold, silver. Comic books. I bet even comic books rallied (full disclosure: I'm long comic books).

What happened? A few days ago, we were talking about a trading range for the S&P 500 between the old historic high of 2,130 and the February lows of 1,830.

Statues of a bear and a bull stand outside the Frankfurt Stock Exchange.
Hannelore Foerster | Bloomberg | Getty Images
Statues of a bear and a bull stand outside the Frankfurt Stock Exchange.

We came very close to new highs on Friday, closing just shy of that 2,130 level. Regardless: It was a remarkable rally.

What happened? The bulls are arguing that the strong June jobs report creates a Goldilocks scenario: We're back to strong job gains, but the Fed is still likely to hold on for some months at the very least.

Bears insist this rally had nothing to do with fundamentals or even with the idea that there is some dramatic improvement in the economy. They say the rally is due to unusually heavy demand for both U.S. stocks and bonds, partly due to foreign demand, partly because central banks are buying up bonds, and partly because investors are forced into U.S. stocks because of a lack of alternatives, and because Europe and China stocks are problematic.

You know what's amazing about this debate? They're both right.

Regardless: Either interpretation means stocks rally. And it was a broad-based rally: 9 stocks were up for every 1 declining.

New highs are expanding — with Industrials like General Electric and UPS suddenly on the new high list.

Where do we go from here? We go to earnings, which start on Monday with Alcoa. And we find out how much this whole Brexit thing might impact the second half of the year. No — it hasn't gone away.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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