Oh.....now it is getting interesting.....but is it getting a bit 'bubbly'?
Nasdaq made history yesterday....breaking out of its 15 yr purgatory....but the breakout did not come with any fanfare, or bells and whistles.......Yesterday at 11:55 am....traders took the Nasdaq up and thru its former high of 5048 - as it ticked at 5049...... - it then quickly failed and fell back to 5043....only to find support and shift into overdrive....the algo's kicked in forcing it to a new all time intraday high of 5069. At the closing bell - Nasdaq ended the day at 5056....signaling a 'new dawn'....and this during what many would consider the worst earnings season in recent memory (negative 4% growth) .....but you say - "That's not so bad..... 80% of the releases have beaten the estimates" ....yeah...but those estimates have been slashed and burned...so I am quite surprised that 100% of reported earnings haven't beaten the estimates...... (It is only for perception purposes......the old 80/20 rule must apply - so some of the companies needed to stand up and take one for 'the team' so that it doesn't look completely manipulated)
This morning's WSJ headlines with "Nasdaq Composite Closes at Record High - Tech Stocks Again Fuel the Rise"......Duh! It is a TECH INDEX.....it could ONLY be tech that fuels its rise (or fall)......Consumer staples, energy, industrials and retailers have nothing to do with how the Nasdaq performs. Nasdaq is about Tech , Bio-tech and social media stocks - names like Apple, Google, Microsoft, Intel, Gilead, Amgen, Facebook...either way - that index today is a far different animal today than it was in March of 2000 but it remains a volatile index all the same.
Remember the bio tech rout in early March and what it did to the index? The bio-tech index got clobbered - down some 11% in 4 days (while individual names got slaughtered even more)....this move then took 5% out of the Nasdaq over that same 4 day period - causing analysts to send out the 'SOS flares'.......Valuations were too high, the bubble was forming and about to burst........but it did not...... So today just 5 weeks later - the Nasdaq Index is now front and center - basking in the sun....there is not resistance above - could the 'blow off' be at our doorstep?
OK...so when the Nasdaq broke out - the rest of the party goers jumped on board....those partygoers are the algos.....was really a traders move.....extremely low volumes, no real excitement....large asset managers are happy to just sit and watch the value of their holdings go up.....no reason yet to hit the sell button - because it's all good......Negative interest rates in some parts of the world, near zero in other parts.....plenty of money supplied by the central banks to keep the party going...... Pass the Kool Aid please......
Analysts/strategists credited the strength to a 'positive reaction' to the latest round of weak earnings from some of the biggies that reported yesterday - So it's a conundrum - right......the positive is that the earnings are NOT weaker than they are......They are just as weak as we expected - so that's a BUY signal? The mkt and the bulls got a shot in arm from another spike in crude oil.......WTI rose $1.5 taking energy stocks up better than 1% - for those investors that strapped it on when oil was trading at $45/barrel - Congratulations....
This has been the story in the month of April.
In mid March - when GS was calling for oil to go to $30/barrel - a base was forming.....and today....WTI is +26% from those lows...... And of course, this has ignited a rally in the energy sector - taking that broad sector up 12%......Considering all the talk of energy sector being dead money for months to come......it is a welcomed relief to see the rebound. But geo-political concerns are still evident....attempts to ease the unrest in Yemen appeared to stumble yesterday......Shite rebels moved forward in the south and the Saudis ramped up their offensive.....now Yemen does not produce any oil to be concerned with - but tankers must navigate the straits around Yemen - where the Red Sea meets the Gulf of Aden...and this is the potential 'Molotov cocktail'.....
On the eco front - New home sales declined by 11% in March and prices fell by 1.7% - m/m but economists quickly noted that new home sales are up 19% y/y.....so is that bullish or bearish? Or does anyone really care anymore? April Manufacturing PMI came in at the weakest in 4 months - exports declined and input prices continue to fall....the report noted that:
"Manufacturers saw a disappointing start to the second quarter, reporting the weakest growth since January. Key to the slowdown was a weakening of export orders, in turn a symptom of the loss of competitiveness arising from the dollar's strength."
For now investors are being very selective, as it feels like bubbles are forming.....Uncertainty about FED policy, GDP growth, wages, job growth, economic growth are all contributing to a changing group of leaders and this is contributing to the lackluster tone in the mkt......with little ambition and no policy guidance for June - investors are now looking forward to summer.
On the geo-political front - we also had some movement out of Greece......except this was not what Angela wanted to hear.....(at all)....Tsipiras essentially told her that
"Greece has made enough sacrifices for the Euro.....it is now Europe's responsibility to keep his country in the currency union"
This morning Varoufakis (Greek Finance Min) is being criticized and called a 'gambler' a 'time waster' and an 'amateur' as the EZ finance ministers view him as irresponsible and become even more frustrated with the antics... Something is about to pop.....but at the moment - mkts do not seem to be concerned.
In Europe - mkts are all higher....investors focusing on earnings - keeping the Greek Tragedy on the back burner...it is almost as if - they are prepared to sit back and watch as Tsipiras and Varoufakis go down the drain. FTSE +0.33%, CAC 40 + 0.73%, DAX +0.77%, EURSTOXX +073%, SPAIN +01.18% and ITALY +1.25%.
US futures are up 3....still partying like its 1999! Eco data today includes Durable goods - exp of +0.6%.....The S&P did test the all time intraday highs at 2120 yesterday before it failed....and while there are multiple earnings releases - none of them will make much of a difference. With the euphoria still fresh - a test of the highs is not out of question....short term support is now building around the 2000 level....so until we hear from the FED next week - expect to remain entrenched between 2000/2120......
This is a great dish and very filling....for this you need:
Sliced garlic Slice garlic cloves, 1 Cup shelled walnuts, bread crumbs, 1/2 cup fresh ricotta, warm water, freshly grated Parmesan, extra virgin olive oil, 1 tablespoon walnut oil, S & P, Broccoli florets cut in half and the pasta....
In a food processor add the garlic and chop.... turn off and scrape down the bowl. Add the walnuts and bread crumbs, and process to a paste. Add the ricotta, 2 tablespoons warm water and Parmesan. Pulse it - do not blend it......add the olive and walnut oils, and mix until smooth. Taste - does it need salt? If so add now..... Transfer it to a large, wide pasta bowl.
Bring a large pot of water to a boil.
Fill another bowl with ice water. When the water comes to a boil, salt generously and add the broccoli florets. Boil four to five minutes, until tender but still bright. Do not throw out the water.........Remove and put in the ice water. Set aside.
Bring the water back to a boil and add the pasta....cooking g for 8 mins....Before you drain the pasta add back the broccoli directly to the water and pasta.....
Remove 1 cup of pasta water and add to the ricotta mixture and stir until well blended. The sauce should have a creamy consistency (add more of the pasta water if necessary).
Now drain the pasta and broccoli and Toss with the sauce in the bowl....add some Parmegiana and have extra on the table for your guests....
Buon Appetito.
Nasdaq made history yesterday....breaking out of its 15 yr purgatory....but the breakout did not come with any fanfare, or bells and whistles.......Yesterday at 11:55 am....traders took the Nasdaq up and thru its former high of 5048 - as it ticked at 5049...... - it then quickly failed and fell back to 5043....only to find support and shift into overdrive....the algo's kicked in forcing it to a new all time intraday high of 5069. At the closing bell - Nasdaq ended the day at 5056....signaling a 'new dawn'....and this during what many would consider the worst earnings season in recent memory (negative 4% growth) .....but you say - "That's not so bad..... 80% of the releases have beaten the estimates" ....yeah...but those estimates have been slashed and burned...so I am quite surprised that 100% of reported earnings haven't beaten the estimates...... (It is only for perception purposes......the old 80/20 rule must apply - so some of the companies needed to stand up and take one for 'the team' so that it doesn't look completely manipulated)
This morning's WSJ headlines with "Nasdaq Composite Closes at Record High - Tech Stocks Again Fuel the Rise"......Duh! It is a TECH INDEX.....it could ONLY be tech that fuels its rise (or fall)......Consumer staples, energy, industrials and retailers have nothing to do with how the Nasdaq performs. Nasdaq is about Tech , Bio-tech and social media stocks - names like Apple, Google, Microsoft, Intel, Gilead, Amgen, Facebook...either way - that index today is a far different animal today than it was in March of 2000 but it remains a volatile index all the same.
Remember the bio tech rout in early March and what it did to the index? The bio-tech index got clobbered - down some 11% in 4 days (while individual names got slaughtered even more)....this move then took 5% out of the Nasdaq over that same 4 day period - causing analysts to send out the 'SOS flares'.......Valuations were too high, the bubble was forming and about to burst........but it did not...... So today just 5 weeks later - the Nasdaq Index is now front and center - basking in the sun....there is not resistance above - could the 'blow off' be at our doorstep?
OK...so when the Nasdaq broke out - the rest of the party goers jumped on board....those partygoers are the algos.....was really a traders move.....extremely low volumes, no real excitement....large asset managers are happy to just sit and watch the value of their holdings go up.....no reason yet to hit the sell button - because it's all good......Negative interest rates in some parts of the world, near zero in other parts.....plenty of money supplied by the central banks to keep the party going...... Pass the Kool Aid please......
Analysts/strategists credited the strength to a 'positive reaction' to the latest round of weak earnings from some of the biggies that reported yesterday - So it's a conundrum - right......the positive is that the earnings are NOT weaker than they are......They are just as weak as we expected - so that's a BUY signal? The mkt and the bulls got a shot in arm from another spike in crude oil.......WTI rose $1.5 taking energy stocks up better than 1% - for those investors that strapped it on when oil was trading at $45/barrel - Congratulations....
This has been the story in the month of April.
In mid March - when GS was calling for oil to go to $30/barrel - a base was forming.....and today....WTI is +26% from those lows...... And of course, this has ignited a rally in the energy sector - taking that broad sector up 12%......Considering all the talk of energy sector being dead money for months to come......it is a welcomed relief to see the rebound. But geo-political concerns are still evident....attempts to ease the unrest in Yemen appeared to stumble yesterday......Shite rebels moved forward in the south and the Saudis ramped up their offensive.....now Yemen does not produce any oil to be concerned with - but tankers must navigate the straits around Yemen - where the Red Sea meets the Gulf of Aden...and this is the potential 'Molotov cocktail'.....
On the eco front - New home sales declined by 11% in March and prices fell by 1.7% - m/m but economists quickly noted that new home sales are up 19% y/y.....so is that bullish or bearish? Or does anyone really care anymore? April Manufacturing PMI came in at the weakest in 4 months - exports declined and input prices continue to fall....the report noted that:
"Manufacturers saw a disappointing start to the second quarter, reporting the weakest growth since January. Key to the slowdown was a weakening of export orders, in turn a symptom of the loss of competitiveness arising from the dollar's strength."
For now investors are being very selective, as it feels like bubbles are forming.....Uncertainty about FED policy, GDP growth, wages, job growth, economic growth are all contributing to a changing group of leaders and this is contributing to the lackluster tone in the mkt......with little ambition and no policy guidance for June - investors are now looking forward to summer.
On the geo-political front - we also had some movement out of Greece......except this was not what Angela wanted to hear.....(at all)....Tsipiras essentially told her that
"Greece has made enough sacrifices for the Euro.....it is now Europe's responsibility to keep his country in the currency union"
This morning Varoufakis (Greek Finance Min) is being criticized and called a 'gambler' a 'time waster' and an 'amateur' as the EZ finance ministers view him as irresponsible and become even more frustrated with the antics... Something is about to pop.....but at the moment - mkts do not seem to be concerned.
In Europe - mkts are all higher....investors focusing on earnings - keeping the Greek Tragedy on the back burner...it is almost as if - they are prepared to sit back and watch as Tsipiras and Varoufakis go down the drain. FTSE +0.33%, CAC 40 + 0.73%, DAX +0.77%, EURSTOXX +073%, SPAIN +01.18% and ITALY +1.25%.
US futures are up 3....still partying like its 1999! Eco data today includes Durable goods - exp of +0.6%.....The S&P did test the all time intraday highs at 2120 yesterday before it failed....and while there are multiple earnings releases - none of them will make much of a difference. With the euphoria still fresh - a test of the highs is not out of question....short term support is now building around the 2000 level....so until we hear from the FED next week - expect to remain entrenched between 2000/2120......
Orrechiette in Walnut Sauce
This is a great dish and very filling....for this you need:
Sliced garlic Slice garlic cloves, 1 Cup shelled walnuts, bread crumbs, 1/2 cup fresh ricotta, warm water, freshly grated Parmesan, extra virgin olive oil, 1 tablespoon walnut oil, S & P, Broccoli florets cut in half and the pasta....
In a food processor add the garlic and chop.... turn off and scrape down the bowl. Add the walnuts and bread crumbs, and process to a paste. Add the ricotta, 2 tablespoons warm water and Parmesan. Pulse it - do not blend it......add the olive and walnut oils, and mix until smooth. Taste - does it need salt? If so add now..... Transfer it to a large, wide pasta bowl.
Bring a large pot of water to a boil.
Fill another bowl with ice water. When the water comes to a boil, salt generously and add the broccoli florets. Boil four to five minutes, until tender but still bright. Do not throw out the water.........Remove and put in the ice water. Set aside.
Bring the water back to a boil and add the pasta....cooking g for 8 mins....Before you drain the pasta add back the broccoli directly to the water and pasta.....
Remove 1 cup of pasta water and add to the ricotta mixture and stir until well blended. The sauce should have a creamy consistency (add more of the pasta water if necessary).
Now drain the pasta and broccoli and Toss with the sauce in the bowl....add some Parmegiana and have extra on the table for your guests....
Buon Appetito.
Recommended Content
Editors’ Picks
EUR/USD steadies above 1.0600, awaits German ZEW and Powell speech
EUR/USD is holding above 1.0600 in the European morning on Tuesday, having hit fresh five-month lows. The pair draws support from sluggish US Treasury bond yields but the rebound appears capped amid a stronger US Dollar and risk-aversion. Germany's ZEW survey and Powell awaited.
GBP/USD stays below 1.2450 after UK employment data
GBP/USD trades marginally lower on the day below 1.2450 in the early European session on Tuesday. The data from the UK showed that the ILO Unemployment Rate in February rose to 4.2% from 4%, weighing on Pound Sterling.
Will Gold reclaim $2,400 ahead of Powell speech?
Gold price consolidates the rebound below $2,400 amid risk-aversion. Dollar gains on strong US Retail Sales data despite easing Middle East tensions. Bullish potential for Gold price still intact on favorable four-hour technical setup.
SOL primed for a breakout as it completes a rounding bottom pattern
Solana price has conformed to the broader market crash, following in the steps of Bitcoin price that remains in the red below the $65,000 threshold. For SOL, however, the sensational altcoin could have a big move in store.
Key economic and earnings releases to watch
The market’s focus may be on geopolitical issues at the start of this week, but there is a large amount of economic data and more earnings releases to digest in the coming days.