How many will Beat?

So by the sounds of it, so many expected yesterday to be the day it all changed! A number of high profile 'tech' names reported earnings and the result were 'less than stellar' - not horrible, but just a bit disappointing......Commodities continued to weaken.........The chatter was all doom and gloom, THIS was going to be the catalyst for the mkt to correct. OMG! What would this all say about China? It's as if the whole world is dependent upon this one country.....It's the herd mentality playing out.....

Apple - reported another great qtr - yet somehow so many seemed to find something wrong with the report or the $48 bil they earned or the 47 mil units they sold or the $49 bil they are expected to earn in the current qtr..whatever.....That is what traders do - they react and pounce.....Investors do not...they do the analysis, they strategize and they lay out the plan - then they take advantage of the opportunity created by the short term disruption....... and take advantage is what they did....buyers yesterday will be patting themselves on the back today as Apple begins the climb back. Look for it struggle a bit at $127.80 - but after that - it's off to the races yet again......Just sayin.....

Then we get the likes of some high profile market strategists - (Dennis Gartman) seeing 'the makings of a protracted bear mkt' - as he, like so many others, jumps on the commodity breakdown bandwagon......Gold, Copper, Oil, Wheat, Soybeans, all collapsing. Is it because of the strong dollar or because of weakening global demand? Are those concepts mutually exclusive? No.....they go hand in hand.....

Hey look! Commodities and the Dollar have an inverse relationship....when one goes up the other goes down - commodities are priced in dollars, foreign buyers will use dollars to buy commodities, so when the value of the dollar rises they have LESS buying power - putting pressure on demand, conversely when the dollar weakens - then they have more buying power which should naturally produce more demand....so before we all go and make ourselves crazy that there is a global slowdown and the end of the world is coming (again) - consider the natural inverse relationship between the dollar commodities. And by the way - weaker oil and food prices NEVER hurt anybody....

Add in the expectation that the Fed is about to raise rates - that will only cause the dollar to get stronger - which will put more pressure on commodities.....so what's the issue? If you believe this relationship then why would you be a buyer in line right now? You wouldn't - but at a discount you might....and if you are a seller you get more anxious as the buyers pull back.....and there it goes - that vicious circle.........But at some point investors realize that the global economy is doing just fine - and the action is not because of a global slowdown.....and then the mkts readjust.....

Today will be a BIG day for the earnings parade.....as the beauty pageant continues....the AMZN, GM, MCD, CAT, BSX, DOW, LUV, LLY, RTN, UA, PHM, AEP to name just a few....already pre-mkt we have heard from a couple

LLY - beat 0.90 vs. 0.73,
UA - beat 0.07 vs. 0.04
DHR - beat $1.08 vs. $1.04
PHM - beat 0.28 vs 0.26
AEP - beat 0.88 vs 0.80

It looks like it is going to be a good day! So far this season 72% of reported companies have beaten analysts estimates......the original -4.5% earnings declines forecast has now been revised to -1.5% overall.....and we aren't even halfway thru the season.....Revenues at reported companies have beaten in 55% of the cases....again better than forecast! So? Is the mkt going to collapse under the weight of better than expected earnings or improving US macro data? Not likely.....it will need a much bigger catalyst to provoke a substantial correction.

This morning US futures are + 3 pts....leaving us smack in the middle of the 2100/2125 trading range. Technically - we are above all of the moving averages....and they all now represent support.....the tone today is more bullish and a test of Monday's highs is not out of the question if the slew of earnings 'beat expectations'.....as investors are more convinced that the picture looks brighter and shorts run for cover.....

In Europe - mkts there are a bit mixed, but mostly in the green as they deal with a flurry of earnings as well. Greece continues to simmer on the back burner and the recent demonstrations only keeps the pressure on. But for now - they do seem to be moving in the right direction. FTSE - +0.05%, CAC 40 + 0.06%, DAX -0.16%, EUROSTOXX -0.1%, SPAIN -0.16% and ITALY -0.24%

Fava Bean Risotto

When you are making a vegetable risotto – you can really choose any vegetable you prefer – this way it is always different and always exciting. Sometimes you can make the risotto to reflect the time of year and sometimes you just make what you like.

For this you need: broccoli florets (cut into small pieces) stems separate and also cut in small pieces. Fava beans, s&p, olive oil, chopped scallions, chopped shallot, Arborio rice, dry white wine, vegetable stock (about 7 cups), butter, fresh grated Parmegiana or Grana Padano Cheese.

Steam the florets for 1 minute – remove, Steam the stems until very tender, about 4 minutes. Keep the water..do not toss. Put the stems (only) in the food processor, and process until smooth. You may have to add some of the water to make a smooth mixture. Scrape out the puree into a small bowl, and set the florets and puree aside.

Heat the olive oil in a heavy pot over med heat, add the scallions and shallots and sauté until translucent – maybe 5 mins.

Nest add the rice, and stir to coat with the oil. Continue to cook so that rice begins to become translucent. Maybe 2 or 3 min). Pour in the wine – do not overdo….maybe like ½ cup, and stir until evaporated. Add a ladle of the hot stock – stir. Stirring constantly, until all of the stock has been absorbed.

Continue to add hot stock one ladle at a time - just enough to completely moisten the rice—and cook until each successive batch has been absorbed. After the risotto has cooked for 15 minutes, add the broccoli purée and the fava beans. Stir to mix well. About 3 minutes after that, stir in the broccoli florets. Stir constantly, and adjust the level of heat to medium/med low so the rice is just simmering while adding the stock, Continue until the rice mixture is creamy but al dente. This should be no longer than 20 mins from the first ladle.

Remove the pot from the heat. Add the butter, until melted, then the grated cheese. Adjust the seasoning with salt, if necessary, and pepper. Serve immediately, ladled into warm bowls.


Buon Appetito.