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$2.2 Trillion In Exports Puts "E" In PE - By Charles Payne

Hosting Cavuto on Fox Business Network 8:00 PM EST

Over the past four years, I've debated every kind of bear under the sun, and for the most part their opinions are driven by a hatred of the Federal Reserve, the White House, or some chart pattern that will only form during "The Day of the Locust". I get it! Heck, I have no love for the Federal Reserve, I think the White House is trying to change America into a socialist utopia that could never exist, and I respect charts and locusts. In my personal opinion however, there is another factor known as mankind--an interesting and, yes, self- destructive beast that has an amazing ability to improve or destroy his surroundings.

Like rams crashing into one another on sheer cliff -ledges and like dolphins that gang up to exert their dominance, the competitive nature of mankind cannot be removed from its DNA. It is a blessing and a curse, but more of the former and the reason why the world gets better. There has never been an economic system better adapted for bringing out that competitive nature in mankind than American-style capitalism. There's no doubt it's under assault, but those who point the fingers and cry foul have no better alternative-none. Sure, American-style capitalism could use a public relations person from time to time, (not that PR-person who got drunk on the flight to South Africa) but it's the best.

The world's getting richer, and the good news is it's been the main driver of America's stock market gains witnessed over the past five years.

Shifting Tide

The bad news is American-style capitalism gains driving the bottom lines for US-based businesses aren't happening on Main Street. For years, America exported world movies, machinery, airplanes, and knowledge. The last one is hard to quantify, but this is the key driver of prosperity in corners of the planet once considered lost causes.

We are in a sweet spot now where prosperity equals demand, not just for raw materials and traditional manufactured goods, but also for luxury items that were once limited to our borders edge.

On the one hand, our trade relationship with the rest of the world is almost that of a tribunal state, (some would go as far to call it a vassal state relationship) because for years we exported raw materials, that often came back as expensive finished goods.

For instance, the US exports electrical equipment, machinery, and plastics to China, that comes back later in the form of exports of toys, machinery, and footwear. Of course, food has always been the top export to China, but even that's changing as China now has the green light to export US raised and slaughtered chickens back to America (see sidebar). Global demand has lead to numerous export records across numerous industries. So, we should celebrate and should raise a few red flags; but these factors have to be acknowledged, if you are going to assess the stock market and America's place in the world.

Gold, Gas, Beans, Cars & Arms

Redistribution of Wealth

As wealth climbs around the world, the best way to bring it back home and create American jobs, is to offer goods and services that are in demand. The great news is the rest of the world wants our stuff, which is why Tiffany (NYSE:TIF), Whirlpool (NYSE:WHR), and Harley- Davidson (NYSE:HOG) have been huge winners for our subscribers. The fact is many of our investment ideas are based on global sales potential and market share gains. There is the issue of job loss in America, which is a red herring. When a Kentucky Fried Chicken outlet opens in China, it is logical to expect Chinese workers to facilitate demand. The same holds for more and more items that need to be assembled or manufactured.

It would be wiser for politicians not to punish, or as the case is now with the administration, to hold hostage earnings from abroad with draconian tax policies and threats. Lower taxes mean that manufacturing jobs could stay in America, while improving our exports. It's a win-win situation for businesses and Main Street, even if it means less money for politicians. Of course, some manufacturing jobs are coming back to America, but even this is mostly symbolic (see Apple and GE), or partly the result of prosperity in other nations. Case in point:

In December 2013, Whirlpool announced it was bringing back jobs from Mexico to Clyde, Ohio. The facilities will be expanded to accommodate these workers where commercial front-load washers will be manufactured for Laundromats, hospitals, and hotels. 90% of these products will be used in America, while 10% will be exported. Meanwhile, that factory in Mexico is being retrofitted to make residential washing machines to meet an explosive demand increase in that nation.

Sky's the Limit

The private-business jet market has been in serious decline since peaking in 2008, as a result of the Great Recession. This hurt American makers, forcing some into bankruptcy and into the hands of suitors. Such is the case with Beech Corporation, the parent of Beechcraft sold to private equity in 2007. The company has been sold to its neighbor and long-time rival Cessna, bringing the hope that the combined companies will be able to take advantage of renewed demand led by global prosperity.

Filling Airspace

Currently, there are 228,000 registered private/business planes in America, and only 1,610 in China. These stats alone suggest huge upside in China and other nations. Adding to the anticipation the Chinese government is allowing private flight in airspace below 3,280 feet now, and, below 9840 feet in 2020.

Shares of Cessna parent Textron (NYSE:TXT), surged on news of the Beech acquisition. Therein lays yet another reason to remain bullish on the stock market.

More on this in tomorrow's morning report.