The headlines read that stocks "corrected" yesterday as Benjamin Netanyahu raises his concerns over the current negotiations taking place between the US, Russia, China, The UK, France and Germany and Iran over its nuclear program. Throw in some more weak macro data and you have the perfect excuse for traders to take some profits and ring the register.
Ok...let's first understand that there was NO correction by any definition of the word - weakness sure, correction - not so much. (The Dow and S&P were off less than 1/2 of 1% - a far cry from a correction). The mkt started the day on a weak note - US macro data revealed disappointing auto sales - blamed on of all things - the weather......Now this is where it goes off the rails for me. For many of us - we live here in the northern hemisphere and for those of us that live in the snowbelt - the weather is not a new development...you see - between December and March - we expect it to snow....and yes - maybe this year the northeast got hit a bit harder than usual - but I do not buy the argument that weather is solely responsible for weaker auto sales.
NEWSFLASH - you do not have to go from car dealer to car dealer any longer! If you are someone that NEEDS a new car - then you go out and buy it...you can sit home and shop online for a car, compare and contrast on any number of websites and make a decision....You know what you want and you can negotiate a price well before you even step into a showroom....so get off the weather argument and focus on what is really behind the weakness in auto sales..... How about a lousy economic environment, how about no wage growth, how about concerns over employment, how about the sense that there is a complete disconnect for so many people between what the gov't is telling us vs. what the reality is?
Now back to Netanyahu.....his speech was impassioned and had a 'take no prisoners' tone.....in fact - the very idea that half of our elected official chose to boycott his speech speaks volumes about their character and by the way....who elected them anyway? We did - they have no business boycotting such an important speech - . No matter how this speech came to be - it was a speech that will find its place in history. Now that being said - we saw the mkts back off once he started speaking - this speech just gave traders a reason to take money off the table - as it only highlights the many geo-political issues that remain a concern. There was not any sense of a correction or panic at all.... The weakness was due to profit taking following the move into new high territory....completely expected and welcomed. Traders - and I say traders because volumes remained subdued - there was no change in psyche that would cause a longer term asset manager to change course - so the trader types just used the news of the day as an excuse to cash in some on their chips on the recent gains amid concerns about the sustainability of this latest rally in light of expectations of higher interest rates in the near future , weaker macro data and simmering geo-political concerns.
In addition to this headline news....the Federal Reserve Bank of Atlanta added fuel to the fire..... they released their version of US GDP forecasts. Their model - dubbed “GDPNow” is showing serious deterioration in the 1Q for the U.S. GDP.
Their model (for real GDP growth) is projected to be 1.2% down from 1.7% just one week ago..... this is in complete contrast to the consensus "blue-chip" projections of 3% which also contradicts the FED's own projection of 1.2%. (Just to clarify we have seen GDP go from 5% in the 3Q of 2014 to 2.2% in the 4Q of 2014 to a projected 1Q 2015 rate of 1.2%. (Go ahead and draw that trend line...what do you see?) This is rather dramatic especially when you consider the Fed has altered the way that they compute GDP and the way that they compute CPI (measure of inflation) that was supposed to actually help improve the bottom line GDP. How's that working for you?
All this was only further confirmed by comments from Target CEO Brian Cornell - who said that he will be cutting 'several thousand' jobs as part of his $2 billion cost savings program......(there's that program again - COST SAVINGS) .
Overnight in Asia - the Reserve Bank of India - CUT rates.....Indians shares celebrate while the rest of the continent saw mixed reviews. Worries over slowing growth in Australia and China weighing on traders' minds.....Japan -0.59%, Hong Kong - 0.96%, China +0.51% and Australia - 0.54%. (Note that China rallied back after the beating it took on Tuesday when that mkt was down some 2.3%)
European mkts are mixed.....as they await the ECB policy meeting tomorrow and clarification on when it will formally start their QE program. Eurozone business activity does show improvement - although slower than the expectation.....Final PMI reported at 53.3 vs. the earlier prediction of 53.5. Remember that Greece is still an issue.....traders and investors are still waiting on the final installment of money......German finance minister Schaeuble is keeping the pressure on Tsipiras - telling him that he must fulfill the preset conditions of the bailout before he sees one more Euro. FTSE -0.03%, CAC 40 +0.15%, DAX -0.12%, EUROSTOXX +0.1%, SPAIN -0.26% AND ITALY +0.08%.
US futures are down 6 pts - signaling further pressure......as I have said - expect to see the mkt test support at 2080/2085 ish....There is no reason at the moment for buyers to become aggressive - patience is a virtue.
Today we get the first read on employment - ADP is expected to show an increase of 220k jobs. Mortgage apps were flat and US PMI Services is expected to show a read of unchanged at 57. At 2 pm today the FED will release its Beige Book readings...expect to hear how great things are - slowly improving, pockets of strength as well as concerns over the labor mkt ....blah, blah, blah.....Nothing new really.
After the data today - the talk turns to Friday's NFP report - and yesterdays' jump in the VIX (+10%) indicates jitters among trades....The high implied volatility suggest that traders and investors are hedging against this report. Will we be surprised? Stay tuned.....
Rigatoni W/Eggplant
This is a great dish that hails from Sicily. it is true comfort food - Simple to make - serve it with your favorite Chianti…
For this you need Garlic, olive oil, Eggplant, Cherry Tomatoes in their juice, s&p, Vidalia onions, and Ricotta Salata. (Ricotta Salata is an unusual cheese. Made from Sheep’s milk – the curds and whey are pressed together and dried before aging – giving this cheese a dense texture with a salty, milky flavor – almost like feta - but drier – It is not a creamy Ricotta cheese at all).
Bring a large pot of salted water to a boil.
In a large frying pan – heat up some olive oil – add in a couple of sliced cloves of garlic and sauté…now add in two med/lg diced Vidalia onions – continue to sauté until soft and translucent – 10 mins….Next add in 4 m- 12 oz cans – of cherry tomatoes in juice. Turn heat to med low and let it simmer - next – with the back of a slotted spoon (or with a fork) crush some of the cherry tomatoes so that you get a chunky sauce while keeping some of the tomatoes whole. Season with s&p.
Make a garlic paste – so - in the food processor add 6/8 garlic cloves and some oil – blend well. Add enough oil – you don’t want a dry paste – you need to toss the cubed eggplant in it – so it can’t be dry.
Dice the eggplant – leaving the skin on…cut it in half and then cut each half into 1” strips and then cut across to make cubes…..add to a large bowl and toss with the garlic paste – let sit for 10 mins.
Now in a separate sauté pan – add a bit more oil and heat up. Now add the eggplant and sauté on med hi heat. Season with s&p. Keep tossing the eggplant until it is cooked. Should take maybe 15 mins or so. Make sure to keep stirring – do not burn. When complete – add to the larger fry pan with the tomatoes. If you need to add a bit water – do so now. Taste for seasoning and adjust if necessary.
Now the pasta – use Rigatoni - this is in the family of Penne Pasta. It is slightly larger and "beefier" – but it screams for a hearty sauce with chunks of meat or veggies etc. In this case we are using “chunks” of sautéed eggplant with Cherry tomatoes. Cook until al dente – maybe 8/10 mins max. Strain the pasta always reserving a mugful of the water – return to the pot – add back ½ the mug of water – stir to re-moisten. Now add directly to the tomatoes and eggplant and allow it to blend for 5 mins or so – keeping the heat on simmer. Serve in warmed bowls with shaved ricotta salata on top
Buon Appetito.
Ok...let's first understand that there was NO correction by any definition of the word - weakness sure, correction - not so much. (The Dow and S&P were off less than 1/2 of 1% - a far cry from a correction). The mkt started the day on a weak note - US macro data revealed disappointing auto sales - blamed on of all things - the weather......Now this is where it goes off the rails for me. For many of us - we live here in the northern hemisphere and for those of us that live in the snowbelt - the weather is not a new development...you see - between December and March - we expect it to snow....and yes - maybe this year the northeast got hit a bit harder than usual - but I do not buy the argument that weather is solely responsible for weaker auto sales.
NEWSFLASH - you do not have to go from car dealer to car dealer any longer! If you are someone that NEEDS a new car - then you go out and buy it...you can sit home and shop online for a car, compare and contrast on any number of websites and make a decision....You know what you want and you can negotiate a price well before you even step into a showroom....so get off the weather argument and focus on what is really behind the weakness in auto sales..... How about a lousy economic environment, how about no wage growth, how about concerns over employment, how about the sense that there is a complete disconnect for so many people between what the gov't is telling us vs. what the reality is?
Now back to Netanyahu.....his speech was impassioned and had a 'take no prisoners' tone.....in fact - the very idea that half of our elected official chose to boycott his speech speaks volumes about their character and by the way....who elected them anyway? We did - they have no business boycotting such an important speech - . No matter how this speech came to be - it was a speech that will find its place in history. Now that being said - we saw the mkts back off once he started speaking - this speech just gave traders a reason to take money off the table - as it only highlights the many geo-political issues that remain a concern. There was not any sense of a correction or panic at all.... The weakness was due to profit taking following the move into new high territory....completely expected and welcomed. Traders - and I say traders because volumes remained subdued - there was no change in psyche that would cause a longer term asset manager to change course - so the trader types just used the news of the day as an excuse to cash in some on their chips on the recent gains amid concerns about the sustainability of this latest rally in light of expectations of higher interest rates in the near future , weaker macro data and simmering geo-political concerns.
In addition to this headline news....the Federal Reserve Bank of Atlanta added fuel to the fire..... they released their version of US GDP forecasts. Their model - dubbed “GDPNow” is showing serious deterioration in the 1Q for the U.S. GDP.
Their model (for real GDP growth) is projected to be 1.2% down from 1.7% just one week ago..... this is in complete contrast to the consensus "blue-chip" projections of 3% which also contradicts the FED's own projection of 1.2%. (Just to clarify we have seen GDP go from 5% in the 3Q of 2014 to 2.2% in the 4Q of 2014 to a projected 1Q 2015 rate of 1.2%. (Go ahead and draw that trend line...what do you see?) This is rather dramatic especially when you consider the Fed has altered the way that they compute GDP and the way that they compute CPI (measure of inflation) that was supposed to actually help improve the bottom line GDP. How's that working for you?
All this was only further confirmed by comments from Target CEO Brian Cornell - who said that he will be cutting 'several thousand' jobs as part of his $2 billion cost savings program......(there's that program again - COST SAVINGS) .
Overnight in Asia - the Reserve Bank of India - CUT rates.....Indians shares celebrate while the rest of the continent saw mixed reviews. Worries over slowing growth in Australia and China weighing on traders' minds.....Japan -0.59%, Hong Kong - 0.96%, China +0.51% and Australia - 0.54%. (Note that China rallied back after the beating it took on Tuesday when that mkt was down some 2.3%)
European mkts are mixed.....as they await the ECB policy meeting tomorrow and clarification on when it will formally start their QE program. Eurozone business activity does show improvement - although slower than the expectation.....Final PMI reported at 53.3 vs. the earlier prediction of 53.5. Remember that Greece is still an issue.....traders and investors are still waiting on the final installment of money......German finance minister Schaeuble is keeping the pressure on Tsipiras - telling him that he must fulfill the preset conditions of the bailout before he sees one more Euro. FTSE -0.03%, CAC 40 +0.15%, DAX -0.12%, EUROSTOXX +0.1%, SPAIN -0.26% AND ITALY +0.08%.
US futures are down 6 pts - signaling further pressure......as I have said - expect to see the mkt test support at 2080/2085 ish....There is no reason at the moment for buyers to become aggressive - patience is a virtue.
Today we get the first read on employment - ADP is expected to show an increase of 220k jobs. Mortgage apps were flat and US PMI Services is expected to show a read of unchanged at 57. At 2 pm today the FED will release its Beige Book readings...expect to hear how great things are - slowly improving, pockets of strength as well as concerns over the labor mkt ....blah, blah, blah.....Nothing new really.
After the data today - the talk turns to Friday's NFP report - and yesterdays' jump in the VIX (+10%) indicates jitters among trades....The high implied volatility suggest that traders and investors are hedging against this report. Will we be surprised? Stay tuned.....
Rigatoni W/Eggplant
(Otherwise known as Pasta Nonna)
This is a great dish that hails from Sicily. it is true comfort food - Simple to make - serve it with your favorite Chianti…
For this you need Garlic, olive oil, Eggplant, Cherry Tomatoes in their juice, s&p, Vidalia onions, and Ricotta Salata. (Ricotta Salata is an unusual cheese. Made from Sheep’s milk – the curds and whey are pressed together and dried before aging – giving this cheese a dense texture with a salty, milky flavor – almost like feta - but drier – It is not a creamy Ricotta cheese at all).
Bring a large pot of salted water to a boil.
In a large frying pan – heat up some olive oil – add in a couple of sliced cloves of garlic and sauté…now add in two med/lg diced Vidalia onions – continue to sauté until soft and translucent – 10 mins….Next add in 4 m- 12 oz cans – of cherry tomatoes in juice. Turn heat to med low and let it simmer - next – with the back of a slotted spoon (or with a fork) crush some of the cherry tomatoes so that you get a chunky sauce while keeping some of the tomatoes whole. Season with s&p.
Make a garlic paste – so - in the food processor add 6/8 garlic cloves and some oil – blend well. Add enough oil – you don’t want a dry paste – you need to toss the cubed eggplant in it – so it can’t be dry.
Dice the eggplant – leaving the skin on…cut it in half and then cut each half into 1” strips and then cut across to make cubes…..add to a large bowl and toss with the garlic paste – let sit for 10 mins.
Now in a separate sauté pan – add a bit more oil and heat up. Now add the eggplant and sauté on med hi heat. Season with s&p. Keep tossing the eggplant until it is cooked. Should take maybe 15 mins or so. Make sure to keep stirring – do not burn. When complete – add to the larger fry pan with the tomatoes. If you need to add a bit water – do so now. Taste for seasoning and adjust if necessary.
Now the pasta – use Rigatoni - this is in the family of Penne Pasta. It is slightly larger and "beefier" – but it screams for a hearty sauce with chunks of meat or veggies etc. In this case we are using “chunks” of sautéed eggplant with Cherry tomatoes. Cook until al dente – maybe 8/10 mins max. Strain the pasta always reserving a mugful of the water – return to the pot – add back ½ the mug of water – stir to re-moisten. Now add directly to the tomatoes and eggplant and allow it to blend for 5 mins or so – keeping the heat on simmer. Serve in warmed bowls with shaved ricotta salata on top
Buon Appetito.
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