Stocks closed a little lower as the qtr came to an unspectacular end - the broader mkt ended the qtr in the plus column with the DOW +1.3%, S&P +0.6% and the Nasdaq + 1.9%....Small caps on the other hand continued to get hit on all sides........as nervousness permeated the thinking causing traders and some investors to unload those riskier holdings. Yesterday's economic data - did little to inspire anyone....Consumer confidence falls as Americans remain suspect over the job market and expectations that economic growth will slow in coming months.
Yes - there was plenty of window dressing going on as institutions rebalanced their portfolios before the end of the quarter statements go out – and it was clear that investors let go of small caps and energy stocks ahead the final qtr of 2014. It does make some sense that institutions are more cautious now - look with QE coming to an end, with Europe on the verge of recession and China readying for a semi hard landing - the mkts remain on edge.
The government and the Fed have tried to spin it that the economy is firing on all cylinders and that the mkts really do not need the liquidity injections to support stock prices but the truth is the mkt has corrected every time the FED has withdrawn the stimulus. Do we need to revisit the 'corrections' that took place once the FED walked away during prior QE programs? This isn’t to say if things get bad enough, the FED won’t roll out another QE in the future after the mid-term elections in fact I suspect that is exactly what will happen if the mkt begins to break down in the coming months.
Housing yesterday told us that the home price index fell by 0.5% - the 3rd month in a row.... The housing market has been giving us a lot of mixed signals of late. New home sales were up big last month but existing home sales were down sharply. What this suggests is that local markets remain very hot but overoptimistic builders are discounting their inventory - throwing in a bunch of 'freebies' - taking care of the financing and leaving the buyer with no reason not to when compared to the process of getting a traditional mortgage from the bank. According to Case-Shiller, home price appreciation continues to show a slowdown, Inventory for new construction is higher, but sales volume on existing homes is down due to higher rates and consumer uncertainty. Wage growth is declining and job growth is coming from part time workers....so what do we think will continue to hold up housing prices?
Today starts the final qtr of 2014......hard to believe - but it is......This morning US futures are down small - 2pts at 1963 – Investors can now get ready for Friday's NFP report and the beginning of earnings next week. ISM manufacturing will be a key report today - exp of 58.5. the ADP employment report is calling for 205k job to be created....we shall see. Trader and investors will also be speculating on what Mario Draghi will say tomorrow - will he remain dovish in light of the continued weak macro data? Ah, Yes...I think so....How could he possibly turn hawkish? Stocks in Europe are lower - weak manufacturing numbers across the region. German PMI fell below 50 to 49.9 (signals contraction) so not a good night for the global growth story.
Look for the mkt to test the low 1960's again to see if the buyers are laying in wait....if not - a test of the 1950 range would not be a surprise at all. I do not think we need to talk about resistance - but just in case - right in here - 1975/1980 is where we should hit a wall.
I am out tomorrow - in DC for a conference - back on Friday.
For this you need:
Boneless Chicken breasts - thin sliced, fresh lemon juice and lemon zest, olive oil, s&p, Arugula, Cherry Tomatoes, garlic cloves, red onion, and a thick balsamic vinegar.
Begin by placing the chicken in a bowl - add the lemon juice, zest, s&p and some olive oil. Mix and massage the breasts to make sure that they are all coated. Let rest for 20 mins or so.
Slice the cherry tomatoes in half and place in another bowl. Add the chopped garlic, sliced red onion, S&P. Toss - now dress with oil and the balsamic vinegar - set aside - do not refrigerate.
Now - when ready - heat up a frying pan - add a dab of butter and some olive oil to the pan...allow it to heat up... Now add the chicken breasts until lightly browned - turn over and repeat. Thin breasts will cook quickly - do not dry out.
To present - Place the chicken on the plate and top with the Arugula. Now spoon the tomato salad on top and finish with shaved slices of Grana Padano Cheese. (You can also use shaved Parmegiana if you prefer). A nice chilled white works well with this.
Buon Appetito.
Yes - there was plenty of window dressing going on as institutions rebalanced their portfolios before the end of the quarter statements go out – and it was clear that investors let go of small caps and energy stocks ahead the final qtr of 2014. It does make some sense that institutions are more cautious now - look with QE coming to an end, with Europe on the verge of recession and China readying for a semi hard landing - the mkts remain on edge.
The government and the Fed have tried to spin it that the economy is firing on all cylinders and that the mkts really do not need the liquidity injections to support stock prices but the truth is the mkt has corrected every time the FED has withdrawn the stimulus. Do we need to revisit the 'corrections' that took place once the FED walked away during prior QE programs? This isn’t to say if things get bad enough, the FED won’t roll out another QE in the future after the mid-term elections in fact I suspect that is exactly what will happen if the mkt begins to break down in the coming months.
Housing yesterday told us that the home price index fell by 0.5% - the 3rd month in a row.... The housing market has been giving us a lot of mixed signals of late. New home sales were up big last month but existing home sales were down sharply. What this suggests is that local markets remain very hot but overoptimistic builders are discounting their inventory - throwing in a bunch of 'freebies' - taking care of the financing and leaving the buyer with no reason not to when compared to the process of getting a traditional mortgage from the bank. According to Case-Shiller, home price appreciation continues to show a slowdown, Inventory for new construction is higher, but sales volume on existing homes is down due to higher rates and consumer uncertainty. Wage growth is declining and job growth is coming from part time workers....so what do we think will continue to hold up housing prices?
Today starts the final qtr of 2014......hard to believe - but it is......This morning US futures are down small - 2pts at 1963 – Investors can now get ready for Friday's NFP report and the beginning of earnings next week. ISM manufacturing will be a key report today - exp of 58.5. the ADP employment report is calling for 205k job to be created....we shall see. Trader and investors will also be speculating on what Mario Draghi will say tomorrow - will he remain dovish in light of the continued weak macro data? Ah, Yes...I think so....How could he possibly turn hawkish? Stocks in Europe are lower - weak manufacturing numbers across the region. German PMI fell below 50 to 49.9 (signals contraction) so not a good night for the global growth story.
Look for the mkt to test the low 1960's again to see if the buyers are laying in wait....if not - a test of the 1950 range would not be a surprise at all. I do not think we need to talk about resistance - but just in case - right in here - 1975/1980 is where we should hit a wall.
I am out tomorrow - in DC for a conference - back on Friday.
Sautéed Chicken WArugula, Grana Padano and Cherry Tomatoes
This is a simple yet colorful and delicious dish - it should take you no longer than 30 mins or so...and is a no brainer.For this you need:
Boneless Chicken breasts - thin sliced, fresh lemon juice and lemon zest, olive oil, s&p, Arugula, Cherry Tomatoes, garlic cloves, red onion, and a thick balsamic vinegar.
Begin by placing the chicken in a bowl - add the lemon juice, zest, s&p and some olive oil. Mix and massage the breasts to make sure that they are all coated. Let rest for 20 mins or so.
Slice the cherry tomatoes in half and place in another bowl. Add the chopped garlic, sliced red onion, S&P. Toss - now dress with oil and the balsamic vinegar - set aside - do not refrigerate.
Now - when ready - heat up a frying pan - add a dab of butter and some olive oil to the pan...allow it to heat up... Now add the chicken breasts until lightly browned - turn over and repeat. Thin breasts will cook quickly - do not dry out.
To present - Place the chicken on the plate and top with the Arugula. Now spoon the tomato salad on top and finish with shaved slices of Grana Padano Cheese. (You can also use shaved Parmegiana if you prefer). A nice chilled white works well with this.
Buon Appetito.
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