The Big Synchronous Market Machine

GM's weak numbers trigger a bond rally, which triggers an SPX rally, which triggers...
Author:
Publish date:

Blame -- or praise -- General Motors (GM) - Get Report. In this knee-bone-connected-to-the-leg-bone market, GM's reporting of a weaker than expected selling number triggered a small rally in bonds, which then triggered a small rally in the SPX futures, which then triggered a tiny rally in a handful of stocks.

The markets are that in sync with each other. When GM was running yesterday, there was talk of blowout numbers by the largest car company. Car sales are this economy, as much as we may want to think the economy is made up of how many books we sell online.

If things have slowed for GM, then maybe the thesis of a second quarter slowdown has some credence. If it has credence, then the bonds are probably oversold and we can buy stocks that act better when rates go down.

The market is constantly pricing in information like this. The macro can never be ignored. Many institutions simply won't buy a

Wal-Mart

(WMT) - Get Report

if rates are going up because they believe that a rate hike affects the value of what you will pay for earnings in the future. Others sell SPX futures or stocks to buy bonds because bonds become cheaper than stocks at certain rates. I know this kind of logic may mystify some of you, especially because we are talking about a 10,000 truck shortfall, but all I am trying to do is explain why the

TheStreet.com Internet Sector

index or the SPX or the bonds seemed to have stopped their tumultuous falls.

Random musings:

Under the category of People Will Trade Anything, did anyone notice the sudden decline in

E*Trade

(EGRP)

when

SEC

Chairman

Arthur Levitt

started talking tough about online trading, and its subsequent lift when it was clear he was calling for self-regulation? Shows that gamblers will gamble on anti-gambling, I guess...Maybe we have gotten through to the talking heads. A pleasant lack of "lack of follow-through" stories from the talking press today.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Wal-Mart, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

letters@thestreet.com.