And the March madness continues...global mkts making new highs - piercing levels not seen in decades, volatility has raised its ugly head during the past couple of months....as traders/investors try to decipher not only the latest FED moves, but moves happening at central banks around the world.
In London - the FTSE surges up and thru 7k, The Dow nearing all-time highs, the S&P rallying up and thru 2100 and NASDAQ within a whisker away from levels not see in a decade. In Asia - Japan piercing 19,500 - still a far cry from the all-time high seen in 1989, yet up a stunning 41% since May 2014.....And China - topping 3600 for the first time in 7 yrs - up 13.4% ytd.....
The drivers continue to be the central banks, current monetary policy and interest rates around the world as they are held at artificially low levels...almost daily comments about how rates may need to be cut further if inflation continues to be elusive can be heard.
By now we all know the ECB story - and what that QE program has done to the Euro/dollar relationship and the reaction it has had on European mkts......In the broader picture - global mkts have had an incredible rally....last week’s commentary from Janet only helped fuel the flames.......and commentary yesterday by Stanley Fischer gave the mkts the sense that they are prepared to ‘kick the can down the road’ some more causing the morning rally to attempt to push higher still.
What did he say?
“Although the recovery has been slow, there has been significant cumulative progress. An increase in the target federal funds range likely will be warranted before the end of the year. Liftoff should occur when the expected return from raising the interest rate outweighs the expected costs of doing so….”
Before the end of the year? Sounds like they just BOOTED that can into the late fall/early winter 2015....and a look at the data supports this.....Look - We have been discussing this.....The FED has backed themselves into a corner and will be reluctant to raise rates anytime soon..... And based on what the recent macro data looks like - Janet and her band of merry men have to acknowledge what is so obvious to the rest of us......the environment 'stinks'......and while the Obama Administration has been trying very hard to convince us that it’s all a bowl of cherries.....investors have to wonder (and rightly so) if growth estimates are too high – in fact the FED – raised that very concern last week when they lowered their expectation for 1Q GDP from 0.6% to 0.3% (a 50% cut) causing many long term asset managers to ‘adjust’ their portfolios ahead of coming earnings.
Last Friday’s move took the mkt back to the Feb highs and into ‘overbought’ territory and yesterday the mkt tested the upper limits at 2115 – trying hard to put in back to back up days…but that was not to be….the mkt hit its head on resistance, buyers backed off and selling pressure landed us in slightly negative territory at the 4 pm closing bell. (This despite the fact that the dollar backed off a bit and crude oil advanced).
1st Qtr earnings only days away – and US multi nationals are about to face the music – and as usual Alcoa - kicks it off – What will they say about the future? What impact will the stronger dollar have on their top and bottom lines? Can that be extrapolated across all industries? Note that investors have absolutely pummeled this stock.....taking it down 25% from the January highs.....all because of dollar concerns and revisions to earnings expectations - Long term asset managers voting with their feet....
Analysts, CEO's and CFO's have been preparing us for what is expected to be an 'earnings recession' season. They have been screaming about the impact of the strong dollar on top line revenues and thus bottom line earnings…..Investors –aware of this phenomenon have taken the bull by the horns and lightened up....but now has the re-pricing already happened? We are about to find out....
Yesterday – we saw the dollar weaken again vs. a basket of currencies – The Euro, the pound, the Australian dollar. Ever since Janet pulled the rug out about a June rate increase – the mkts have been re-pricing the risk of higher rates vs. a higher dollar….Recent action has seen the dollar retreat by 3% heading towards it 50 dma trendline at 95.40....Keep your eyes on the next move…..a test of this level is key.....a break below 95.40 could see the dollar move to the $93.50/94.50 range as it looks to stabilize. (This will be a welcomed relief). If that happens look for oil,(along with other commodities) to find its footing and move higher. And what this means is that investors and traders will continue to find equities attractive… so even a pullback in equity prices will not yield a real ‘correction’ so long as that 'can' is out of sight.
Overnight in Asia – mkts ended mixed as China Flash Manufacturing PMI disappointed….falling to 49.2 – an 11 month low – causing investors once again to question their momentum (remember a number below 50 signals contraction) ….Australian mkts ended the day higher as it found support from stabilizing commodity prices – helped out by a weaker dollar. Japan -0.21%, Hong Kong -0.35%, China +0.11% and ASX +0.22%.
In Europe – mkts on edge a bit over renewed concern about Greece. Talks overnight yielded little in the way of real progress….Greek PM Tsipiras telling Germany’s Merkel that “it wasn’t right to hold foreigners responsible for the country’s problems” while also promising “big structural reforms” – but talk is cheap and those reforms are not forthcoming….so keep your eyes peeled.....On the macro front - German PMI beat expectations and Eurozone business activity hitting a 4 yr high, even France showing better results in the private sector reports. all this sending signals that real growth is finally taking root......(Greece who?) FTSE +0.31%, CAC 40 +0.62%, DAX +0.42%, EUROSTOXX +0.50%, SPAIN +0.46% and ITALY +0.75%.
US futures have been swinging between positive and negative moments all night and are currently +5 pts at 2099 just below its resistance at 2105.......Overnight we heard from both Former Dallas Fed Pres - Richard Fisher and St. Louis Pres Bullard. Both men are advocating for higher rates - sooner rather than later and are out of the this country speaking at events in Asia and London.
On Tuesday in Asia – Richard Fisher – former Dallas Fed President – telling viewers that the US economy is in a ‘sweet spot’ and that its time for the FED to begin raising rates – or as he said
"Monetary policy acts with a lag. You don't just step on the brakes and stop. I think it's important we begin the process of normalization, fully aware of the fact that others [including the European Central Bank and Bank of Japan] may be diverging in another direction,"
And this morning in London - Bullard made it clear that "Zero is no longer the appropriate interest rate for the US economy" and that a rate hike in the 'summer' would be appropriate..... And so the debate rages on......As Janet sends out the troops to 'test' the mkts reaction.....
So far - the mkt is not having a negative reaction - but investors are just wiping the sand from their eyes - This is sure to be a topic of discussion as the day wears on…..
Eco data today includes: CPI (Consumer Price Index) exp of +0.2%, Ex food and energy of +0.1%. Markit US Manufacturing PMI of 54.6 (expansionary) and New Home Sales of 464k which would represent a 3.5% DECLINE m/m.
For this you need - Fusilli - that curly spaghetti, diced onion, chopped garlic, olive oil, Roasted Sweet Red Peppers, Tomato paste, chicken broth and s&p, fresh basil.
Bring a pot of salted water to a rolling boil - add the Fusilli
Now - in a pot - heat the oil, and sauté the onion until soft and tender - it may take on that golden delicious color.....Add the garlic - do not let the garlic burn!
Next - put the Onions & garlic in the food processor, add the chicken broth, tomato paste, and sweet red peppers, - Blend. - season with s&p and put back in a lg sauté pan to keep warm - on simmer......
When the fusilli is done - strain - always reserving a mugful of water - return to pot - add back a bit of the water - stir and allow to absorb. Now toss the pasta into the sauté pan and mix well. You can always add a bit more of the water if you need to.
Always have fresh grated Parmegiana cheese available. Serve in warmed bowls and toasted garlic bread never hurts
Buon Appetito.
In London - the FTSE surges up and thru 7k, The Dow nearing all-time highs, the S&P rallying up and thru 2100 and NASDAQ within a whisker away from levels not see in a decade. In Asia - Japan piercing 19,500 - still a far cry from the all-time high seen in 1989, yet up a stunning 41% since May 2014.....And China - topping 3600 for the first time in 7 yrs - up 13.4% ytd.....
The drivers continue to be the central banks, current monetary policy and interest rates around the world as they are held at artificially low levels...almost daily comments about how rates may need to be cut further if inflation continues to be elusive can be heard.
By now we all know the ECB story - and what that QE program has done to the Euro/dollar relationship and the reaction it has had on European mkts......In the broader picture - global mkts have had an incredible rally....last week’s commentary from Janet only helped fuel the flames.......and commentary yesterday by Stanley Fischer gave the mkts the sense that they are prepared to ‘kick the can down the road’ some more causing the morning rally to attempt to push higher still.
What did he say?
“Although the recovery has been slow, there has been significant cumulative progress. An increase in the target federal funds range likely will be warranted before the end of the year. Liftoff should occur when the expected return from raising the interest rate outweighs the expected costs of doing so….”
Before the end of the year? Sounds like they just BOOTED that can into the late fall/early winter 2015....and a look at the data supports this.....Look - We have been discussing this.....The FED has backed themselves into a corner and will be reluctant to raise rates anytime soon..... And based on what the recent macro data looks like - Janet and her band of merry men have to acknowledge what is so obvious to the rest of us......the environment 'stinks'......and while the Obama Administration has been trying very hard to convince us that it’s all a bowl of cherries.....investors have to wonder (and rightly so) if growth estimates are too high – in fact the FED – raised that very concern last week when they lowered their expectation for 1Q GDP from 0.6% to 0.3% (a 50% cut) causing many long term asset managers to ‘adjust’ their portfolios ahead of coming earnings.
Last Friday’s move took the mkt back to the Feb highs and into ‘overbought’ territory and yesterday the mkt tested the upper limits at 2115 – trying hard to put in back to back up days…but that was not to be….the mkt hit its head on resistance, buyers backed off and selling pressure landed us in slightly negative territory at the 4 pm closing bell. (This despite the fact that the dollar backed off a bit and crude oil advanced).
1st Qtr earnings only days away – and US multi nationals are about to face the music – and as usual Alcoa - kicks it off – What will they say about the future? What impact will the stronger dollar have on their top and bottom lines? Can that be extrapolated across all industries? Note that investors have absolutely pummeled this stock.....taking it down 25% from the January highs.....all because of dollar concerns and revisions to earnings expectations - Long term asset managers voting with their feet....
Analysts, CEO's and CFO's have been preparing us for what is expected to be an 'earnings recession' season. They have been screaming about the impact of the strong dollar on top line revenues and thus bottom line earnings…..Investors –aware of this phenomenon have taken the bull by the horns and lightened up....but now has the re-pricing already happened? We are about to find out....
Yesterday – we saw the dollar weaken again vs. a basket of currencies – The Euro, the pound, the Australian dollar. Ever since Janet pulled the rug out about a June rate increase – the mkts have been re-pricing the risk of higher rates vs. a higher dollar….Recent action has seen the dollar retreat by 3% heading towards it 50 dma trendline at 95.40....Keep your eyes on the next move…..a test of this level is key.....a break below 95.40 could see the dollar move to the $93.50/94.50 range as it looks to stabilize. (This will be a welcomed relief). If that happens look for oil,(along with other commodities) to find its footing and move higher. And what this means is that investors and traders will continue to find equities attractive… so even a pullback in equity prices will not yield a real ‘correction’ so long as that 'can' is out of sight.
Overnight in Asia – mkts ended mixed as China Flash Manufacturing PMI disappointed….falling to 49.2 – an 11 month low – causing investors once again to question their momentum (remember a number below 50 signals contraction) ….Australian mkts ended the day higher as it found support from stabilizing commodity prices – helped out by a weaker dollar. Japan -0.21%, Hong Kong -0.35%, China +0.11% and ASX +0.22%.
In Europe – mkts on edge a bit over renewed concern about Greece. Talks overnight yielded little in the way of real progress….Greek PM Tsipiras telling Germany’s Merkel that “it wasn’t right to hold foreigners responsible for the country’s problems” while also promising “big structural reforms” – but talk is cheap and those reforms are not forthcoming….so keep your eyes peeled.....On the macro front - German PMI beat expectations and Eurozone business activity hitting a 4 yr high, even France showing better results in the private sector reports. all this sending signals that real growth is finally taking root......(Greece who?) FTSE +0.31%, CAC 40 +0.62%, DAX +0.42%, EUROSTOXX +0.50%, SPAIN +0.46% and ITALY +0.75%.
US futures have been swinging between positive and negative moments all night and are currently +5 pts at 2099 just below its resistance at 2105.......Overnight we heard from both Former Dallas Fed Pres - Richard Fisher and St. Louis Pres Bullard. Both men are advocating for higher rates - sooner rather than later and are out of the this country speaking at events in Asia and London.
On Tuesday in Asia – Richard Fisher – former Dallas Fed President – telling viewers that the US economy is in a ‘sweet spot’ and that its time for the FED to begin raising rates – or as he said
"Monetary policy acts with a lag. You don't just step on the brakes and stop. I think it's important we begin the process of normalization, fully aware of the fact that others [including the European Central Bank and Bank of Japan] may be diverging in another direction,"
And this morning in London - Bullard made it clear that "Zero is no longer the appropriate interest rate for the US economy" and that a rate hike in the 'summer' would be appropriate..... And so the debate rages on......As Janet sends out the troops to 'test' the mkts reaction.....
So far - the mkt is not having a negative reaction - but investors are just wiping the sand from their eyes - This is sure to be a topic of discussion as the day wears on…..
Eco data today includes: CPI (Consumer Price Index) exp of +0.2%, Ex food and energy of +0.1%. Markit US Manufacturing PMI of 54.6 (expansionary) and New Home Sales of 464k which would represent a 3.5% DECLINE m/m.
Fusilli in a Roasted Sweet Red Pepper Sauce
You can make the sauce in the time it takes to boil the Fusilli .....10 mins.For this you need - Fusilli - that curly spaghetti, diced onion, chopped garlic, olive oil, Roasted Sweet Red Peppers, Tomato paste, chicken broth and s&p, fresh basil.
Bring a pot of salted water to a rolling boil - add the Fusilli
Now - in a pot - heat the oil, and sauté the onion until soft and tender - it may take on that golden delicious color.....Add the garlic - do not let the garlic burn!
Next - put the Onions & garlic in the food processor, add the chicken broth, tomato paste, and sweet red peppers, - Blend. - season with s&p and put back in a lg sauté pan to keep warm - on simmer......
When the fusilli is done - strain - always reserving a mugful of water - return to pot - add back a bit of the water - stir and allow to absorb. Now toss the pasta into the sauté pan and mix well. You can always add a bit more of the water if you need to.
Always have fresh grated Parmegiana cheese available. Serve in warmed bowls and toasted garlic bread never hurts
Buon Appetito.
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