"At Last?"

Stocks attempted a gritty recovery but ended mostly flat in both Europe and the US yesterday as the mkt continued to welcome better earnings while trying to balance investment decisions with the continued unrest in Gaza & Ukraine.

Yesterday's weak Pending Home Sales - did little to affect investors' appetite - I mean - the housing story is old news....one day its strong the next day its weak....so for the most part - it is a non event for stock investors - No one is buying or selling IBM because Pending Home Sales are weaker than expected. Now Toll Brothers - that is a different story - In fact - if IBM sold off because ' housing is weaker' - then that screams opportunity.....

In the end though stocks ended mostly flat with a mixed close - DOW +22 pts, S&P flat, Nasdaq -5 and the Russell off small. Traders continue to feel a bit nervous.....you can feel the crowd gathering around the door - yet no one wants to scream 'FIRE' in the movie theater (although GS did scream NEUTRAL)

Yes - traders are cautious ahead of some potentially market-moving events and data - and like I said yesterday - Janet Yellen is the star of the show this week....What can we expect? Will she suddenly surprise us? Is the mkt ready for higher rates sooner than expected? Is anyone else tired of this conversation? I mean - it is what it is....Yes - tapering on schedule - another $10 bil this month and completion by the end of October - no issues.

But will this improving economy force the FED to reset the table? The majority of economists think not - but that does not mean it will be so.... I guess what we have learned is that 'anything IS possible' so investors are trying to cover all bases....

I think what is important - and Janet did say this last month - she (and the FED) need to figure out how to communicate strategy - how to raise rates without creating 'panic' in the mkts....but what is confusing to me - is why should there be panic at all? HOW LONG HAVE WE BEEN TALKING ABOUT WHAT THE FED HAS TO DO? Who could possibly be surprised at all?

Will Janet be singing karaoke to the famous Etta James's version of "At Last"?

"At last my love has come along, My lonely days are over and life is like a song? Oh yeah, At last the skies above are blue".....

Again - if the skies above are in fact blue and the lonely days are over - then the mkts should celebrate (or have they already done that???) - I guess we are about to find out.....

Look - they clearly are having the conversation about when, how much, how often, etc...... the hawkish side of the table will and has been 'Yellen' for an end to artificially low rates as soon as late 2014/early 2015.....the mkt is NOT ready for that - only because all of the chatter has been late spring/early summer 2015....with many of the major investment banks all huddled around 3rd Q 2015.....so any move like that - will cause the mkts to become unnerved - at least for one trading day....

But there is that housing monster again......as we know this should be the strongest part of the season for housing....but that does not seem to be the case.....Yesterday's report showed an 'unexpected drop' of 1.1% in pending sales. Stocks had no reaction - is this because investors are now secure in the fact that Janet will hold off on raising rates?

Lawrence Yun - Chief Economist at the National Assoc of Realtors had this to say

- "Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved. However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates,"

He then went onto say that "existing home sales are projected to fall another 2.8% this year despite the projection that housing prices are expected to rise between 5-6% over the next 12-18 months."

So demand falls off and prices rise??? Isn't that an oxymoron? Since when does falling demand - create rising prices....? This guy has it backwards....Rising prices - creates falling demand which then creates falling prices to stabilize demand....(Econ 101). And the rising cost of money (interest rates) will only create less demand as the cost of carrying that home increases exponentially. Any questions?

It is very clear now that the mkts are in a holding pattern - not crashing, but no reason to move substantially higher....in fact for the month of July - the mkt has traded between 1961/1980 - as investors await some new news..... Any thoughts?

US futures are +3 pts this morning as mkts around the world are all green.....In Asia - stocks rose (again) sending the regional index to a 6 yr high...bonds like treasuries moved a bit lower, oil fell and Gold rallied.

Ukraine inching towards a 'win' against the Russian Rebels - as the Ukrainian army pushes the rebels back....In the meantime both US and EU leaders have agreed to impose further sanctions on the Russian Mob....sanctions aimed at increasing the pressure on Vladimir....

In the mid-east - The Gaza/Israel conflict continues as world leaders come together to find a solution and Netanyahu warns Israeli's to 'batten down the hatches' this time is different.

We remain in the 1961/1980 range with little to no reason for traders/investors to do much of anything prior to the release of the FED mins and GDP tomorrow. The ADP report will give us a clue to what the NFP report should look like - but anything at 230k+ will be met with celebration....no matter that the majority of jobs are part time/no benefits! (But that's another conversation).

We continue to get hit with a host of earnings announcements and M&A activity - and as long as they remain strong - it is hard to see why we should expect a 'fallout' ....

Linguine Michael-Angelo

This is a simple dish to make....it is a favorite of Italian sculptor, painter, architect and poet of the high renaissance. A man of unparallel influence over the world. Michael Angelo - long considered one of the greatest living artists the world has known was also a simple man - enjoying simple dishes - so today - Won't you give this a try?

For this you need:
Linguine, fresh spinach, yellow raisins, pignogli nuts, fresh ricotta olive oil and fresh grated parmegiano.

Begin by bringing a pot of salted water to a boil. add the Linguine.

In a bowl -add hot water and soak the raisins.

Now in a deep frying pan - add a bit of olive oil and toast the nuts....stirring not to burn. Once toasted - set aside. In the same pan - add a bit more oil and the spinach. Season with s&p and sauté.

After about 3 mins - add in a small container of the fresh ricotta - stir to melt and blend. Now - add in a ladle of the pasta water. Stir.

Now add the raisins - stir - When the pasta is almost done - remove directly from the pan and add to the frying pan with the spinach and ricotta mix. Toss nicely to coat. Add the pignogli nuts and another ladle of pasta water.

Once well mixed - add in a couple of hands of fresh cheese - toss and serve.

Simple and very classic - just like Michael-Angelo.


Buon Appetito.