Kenny Polcari
KennyPolcari.com
OH, oh, oh...."Where do I begin, to tell the story of how great a love can be"? It is the end of the qtr.......lots of window dressing taking place.......
Global mkts are SURGING... Asian mkts ended the day in positive territory - Japan + 2.7%, Hong Kong + 1.4%, China +0.4%, ASX +2.1%.....As morning turns to afternoon in Europe - we see those mkts all moving up....FTSE +2.05%, CAC 40 + 2.60%, DAX +2.45%, EUROSTOXX +2.5%, SPAIN +2.3% and ITALY +2.3%....even Greece is up 2.27%...... As a new day dawns here in America - we see US futures pointing higher (taking its lead from around the world) - currently up 22 pts....hitting her head on resistance at 1900.....oh but the day is young....
September has seen some $11 trillion dollars wiped off the face of the earth and the 3rd qtr of 2015 will go down in history as one of the most volatile qtrs for global financial mkts since the depths of despair of the GFC (Great Financial Crisis).
So - is this just a 'one off' on the road to more volatility and weakness ahead? The bears will tell you that nothing has really changed between 4 pm last night and 6 am today....and the Bulls will tell you that there is a sale going on and that the global outlook is not nearly as negative as the bear case......so you decide - which side are you on?
We still have the issues - slowing China, Fed policy, coming earnings, European deflation - yes folks that is correct - I did say DEFLATION....because the Euro area's inflation rate is now negative -as reported today by the European Union Statistics office based in Luxembourg.....the 19 nation block reported that inflation fell 0.1% y/y vs. an estimate of 0% ...unemployment remains stubbornly high at 11% and so this news only adds pressure on the ECB ( European Central Bank) to RAMP UP its stimulus program.
Giada Giani - Economist at Citi in London says that this read was "broadly driven by the energy component, but there are very little inflationary pressures even aside from the oil-price shock..."
So this puts Uncle Mario (Draghi) in a tough position - because the last thing he wants is DEFLATION....and so now - the smart money is betting that he will increase his current $1.2 bil stimulus plan before year end.....
What does this mean for the US? What will Janet do now? Can she raise rates (even insignificantly) now that Europe is in a deflationary mode? We may find out later on today....because - unlike yesterday - we are due to get more FED speak during the day....Janet will be speaking at 3 pm in St Louis, while Bullard (St Louis) and Dudley (New York) and Fed Governor Lael Brainard also take to the airwaves during the course of the day.... Strap in for this.....we are sure to get a range of mixed messages as each one opens their mouth and mixed messages translates into volatility.....who will the mkt pay attn to? The Hawks or the Doves?
Ok...so yesterday we started to see the discount buyers pick away.....but they did remain a bit apprehensive - taking the mkt right up to 1900 where it hit resistance, causing the buyers to back off a bit...........Biotech's got a bit of break in the morning, but then took it on the chin again by day's end. Many big cap names also came under pressure as the day wore on - making it seem like investors were raising cash in the names that they could vs. inflicting more damage on some of the mid to small cap names... Demand for treasuries (always a safe bet) rose....
The sense is that the skittishness is alive and well and many do not want to be caught on the wrong side of these daily knee jerk reactions....today brings us the ADP employment report - exp of +190k jobs is right in line with recent reports...so this is NOT a mkt mover - unless of course it surprises BIG in either direction......Friday brings us the gov't NFP report - and exp for that are +200k so again - this is NOT a barn burner unless of course that number surprises as well. This is the last read on job creation before the FED makes its next decision.....
'Threats' of a 25 bps rise off of a ZIRP (zero interest rate policy) continue to permeate the
conversation.....but the global economy continues to be uncooperative....but at some point - we must do what we must do.....It will just be interesting to see how they 'position it' now......considering they found EVERY excuse NOT to raise rates when it made perfect sense to do so.....
If the investors really want the FED to raise rates - because they think it is the right thing to do - then we should expect that the mkt will surge on that move....but you can also argue that even though they may want rates to normalize - the mkt is not prepared for that considering the state of the global economy and that will cause the mkt to weaken...... so in the end - we must play the hand we are dealt.....Preparation is key.....
Tomorrow brings the world a read on China's Sept manf activity.......and this will surely give us more insight into the economic health of that country.....or at least that is what it is supposed to do.....Will that reading be below 50 (which we already know it is via the preliminary read last week) and if so - what's the big deal...the mkts have already DISCOUNTED this negative number..... would this be a 'sell the rumor, buy the news' type of event? Or will the bears stand up and scream that China is circling the drain.....(a bit dramatic)
Look - when the mkts are in a fragile state, when all we hear is angst, anxiety and negativity - then no matter what - everything appears to be bad news.....and so the mkts tend to be erratic.....but if you are an optimist - then here is your opportunity.....Remember the famous WB (Warren Buffet) words:
"Be greedy when others are fearful and be fearful when others are greedy".....it seems that right now - 'others are fearful'......I'm just sayin.....
On a side note (speaking of negative) - this morning's WSJ announces that BofA (Bank of America/Merril Lynch) has begun the process of LAYOFFS....
"BofA Merrill Confronts Austerity" - and so the annual Wall St dance has begun.....Yes folks - it is that time of year.....every investment bank is trying to manage yr end expectations in terms of compensation and opportunity..... Yesterday - BAC began 'the process' as they are forced to do 'more with less'... a common theme of late..... Expect to see a sea of blood on the street before Thanksgiving.....in fact - we will start to get the news as each one reports earnings in the next couple of weeks.
On the other hand (speaking of positive) - Case Shiller tells us that Home Price Growth remains strong and vibrant...rising 4.7% m/m....although mort apps this morning are down 6.7%......
US Futures are UP 24 pts.... and if they stay strong into the bell then watch the S&P pierce 1900 (psychological resistance) early on.....if it does look for short term resistance at 1905 ish...if we pierce that - then it's 1925!
Remember - it IS the end of qtr...so lots of window dressing. Tomorrow wipes the slate clean and asset managers have another 3 months to make it work......Although I still think we end the year higher from here - I no longer believe that we will end the year with a 2100 handle.....But - we shall see.....
This comes right from the Amalfi Coast - and for those of you who have never been - it is a MUST see....a spectacular coastline that goes from Sorrento to Salerno - with 110 hairpin turns along the cliffs of the coastline... You can see, Positano, Ravello, Amalfi, Salerno, Sorrento and everywhere in between...and this is the perfect time to go....Weather is perfect and the Mediterranean is spectacular....
Now - Lemons are what the Amalfi coast is all about......Think Sorrento and the fantastic Limoncello they produce.....
For this you need: Butter, Olive Oil, Finely Chopped Onion, Arborio Rice, Dry White Wine, Vegetable Broth, Heated, Juice From 1 Large Lemon, Fresh Lemon Zest, Cleaned Fresh Shrimp, Chopped into bite size pieces.
And to finish it off - Butter, Finely Chopped Parsley and Lemon Zest
Heat the butter and oil in a heavy saucepan over medium heat. Add the onions and cook until they are translucent, about 7 minutes Add the rice and stir until it is well coated with the butter and oil and cook for 2 minutes. Add the white wine, and stir continually over medium heat until it is absorbed.
Start to add 1/2 cup of hot broth, stirring as it is absorbed. Keep adding the broth stirring continuously for about 15 minutes. This is not the kind of dish that you just leave on the stove simmering...You need to be fully engaged.
Next add the lemon juice, zest, and shrimp, and continue to cook, adding the broth, until the risotto is cooked, but remains slightly firm to the bite.
Remove from the heat, add the butter and the parsley. Serve in individual bowls, garnished with additional lemon zest.
Buon Appetito.
Global mkts are SURGING... Asian mkts ended the day in positive territory - Japan + 2.7%, Hong Kong + 1.4%, China +0.4%, ASX +2.1%.....As morning turns to afternoon in Europe - we see those mkts all moving up....FTSE +2.05%, CAC 40 + 2.60%, DAX +2.45%, EUROSTOXX +2.5%, SPAIN +2.3% and ITALY +2.3%....even Greece is up 2.27%...... As a new day dawns here in America - we see US futures pointing higher (taking its lead from around the world) - currently up 22 pts....hitting her head on resistance at 1900.....oh but the day is young....
September has seen some $11 trillion dollars wiped off the face of the earth and the 3rd qtr of 2015 will go down in history as one of the most volatile qtrs for global financial mkts since the depths of despair of the GFC (Great Financial Crisis).
So - is this just a 'one off' on the road to more volatility and weakness ahead? The bears will tell you that nothing has really changed between 4 pm last night and 6 am today....and the Bulls will tell you that there is a sale going on and that the global outlook is not nearly as negative as the bear case......so you decide - which side are you on?
We still have the issues - slowing China, Fed policy, coming earnings, European deflation - yes folks that is correct - I did say DEFLATION....because the Euro area's inflation rate is now negative -as reported today by the European Union Statistics office based in Luxembourg.....the 19 nation block reported that inflation fell 0.1% y/y vs. an estimate of 0% ...unemployment remains stubbornly high at 11% and so this news only adds pressure on the ECB ( European Central Bank) to RAMP UP its stimulus program.
Giada Giani - Economist at Citi in London says that this read was "broadly driven by the energy component, but there are very little inflationary pressures even aside from the oil-price shock..."
So this puts Uncle Mario (Draghi) in a tough position - because the last thing he wants is DEFLATION....and so now - the smart money is betting that he will increase his current $1.2 bil stimulus plan before year end.....
What does this mean for the US? What will Janet do now? Can she raise rates (even insignificantly) now that Europe is in a deflationary mode? We may find out later on today....because - unlike yesterday - we are due to get more FED speak during the day....Janet will be speaking at 3 pm in St Louis, while Bullard (St Louis) and Dudley (New York) and Fed Governor Lael Brainard also take to the airwaves during the course of the day.... Strap in for this.....we are sure to get a range of mixed messages as each one opens their mouth and mixed messages translates into volatility.....who will the mkt pay attn to? The Hawks or the Doves?
Ok...so yesterday we started to see the discount buyers pick away.....but they did remain a bit apprehensive - taking the mkt right up to 1900 where it hit resistance, causing the buyers to back off a bit...........Biotech's got a bit of break in the morning, but then took it on the chin again by day's end. Many big cap names also came under pressure as the day wore on - making it seem like investors were raising cash in the names that they could vs. inflicting more damage on some of the mid to small cap names... Demand for treasuries (always a safe bet) rose....
The sense is that the skittishness is alive and well and many do not want to be caught on the wrong side of these daily knee jerk reactions....today brings us the ADP employment report - exp of +190k jobs is right in line with recent reports...so this is NOT a mkt mover - unless of course it surprises BIG in either direction......Friday brings us the gov't NFP report - and exp for that are +200k so again - this is NOT a barn burner unless of course that number surprises as well. This is the last read on job creation before the FED makes its next decision.....
'Threats' of a 25 bps rise off of a ZIRP (zero interest rate policy) continue to permeate the
conversation.....but the global economy continues to be uncooperative....but at some point - we must do what we must do.....It will just be interesting to see how they 'position it' now......considering they found EVERY excuse NOT to raise rates when it made perfect sense to do so.....
If the investors really want the FED to raise rates - because they think it is the right thing to do - then we should expect that the mkt will surge on that move....but you can also argue that even though they may want rates to normalize - the mkt is not prepared for that considering the state of the global economy and that will cause the mkt to weaken...... so in the end - we must play the hand we are dealt.....Preparation is key.....
Tomorrow brings the world a read on China's Sept manf activity.......and this will surely give us more insight into the economic health of that country.....or at least that is what it is supposed to do.....Will that reading be below 50 (which we already know it is via the preliminary read last week) and if so - what's the big deal...the mkts have already DISCOUNTED this negative number..... would this be a 'sell the rumor, buy the news' type of event? Or will the bears stand up and scream that China is circling the drain.....(a bit dramatic)
Look - when the mkts are in a fragile state, when all we hear is angst, anxiety and negativity - then no matter what - everything appears to be bad news.....and so the mkts tend to be erratic.....but if you are an optimist - then here is your opportunity.....Remember the famous WB (Warren Buffet) words:
"Be greedy when others are fearful and be fearful when others are greedy".....it seems that right now - 'others are fearful'......I'm just sayin.....
On a side note (speaking of negative) - this morning's WSJ announces that BofA (Bank of America/Merril Lynch) has begun the process of LAYOFFS....
"BofA Merrill Confronts Austerity" - and so the annual Wall St dance has begun.....Yes folks - it is that time of year.....every investment bank is trying to manage yr end expectations in terms of compensation and opportunity..... Yesterday - BAC began 'the process' as they are forced to do 'more with less'... a common theme of late..... Expect to see a sea of blood on the street before Thanksgiving.....in fact - we will start to get the news as each one reports earnings in the next couple of weeks.
On the other hand (speaking of positive) - Case Shiller tells us that Home Price Growth remains strong and vibrant...rising 4.7% m/m....although mort apps this morning are down 6.7%......
US Futures are UP 24 pts.... and if they stay strong into the bell then watch the S&P pierce 1900 (psychological resistance) early on.....if it does look for short term resistance at 1905 ish...if we pierce that - then it's 1925!
Remember - it IS the end of qtr...so lots of window dressing. Tomorrow wipes the slate clean and asset managers have another 3 months to make it work......Although I still think we end the year higher from here - I no longer believe that we will end the year with a 2100 handle.....But - we shall see.....
Risotto di Limone & Gamberi
(Lemon Risotto with Shrimp)This comes right from the Amalfi Coast - and for those of you who have never been - it is a MUST see....a spectacular coastline that goes from Sorrento to Salerno - with 110 hairpin turns along the cliffs of the coastline... You can see, Positano, Ravello, Amalfi, Salerno, Sorrento and everywhere in between...and this is the perfect time to go....Weather is perfect and the Mediterranean is spectacular....
Now - Lemons are what the Amalfi coast is all about......Think Sorrento and the fantastic Limoncello they produce.....
For this you need: Butter, Olive Oil, Finely Chopped Onion, Arborio Rice, Dry White Wine, Vegetable Broth, Heated, Juice From 1 Large Lemon, Fresh Lemon Zest, Cleaned Fresh Shrimp, Chopped into bite size pieces.
And to finish it off - Butter, Finely Chopped Parsley and Lemon Zest
Heat the butter and oil in a heavy saucepan over medium heat. Add the onions and cook until they are translucent, about 7 minutes Add the rice and stir until it is well coated with the butter and oil and cook for 2 minutes. Add the white wine, and stir continually over medium heat until it is absorbed.
Start to add 1/2 cup of hot broth, stirring as it is absorbed. Keep adding the broth stirring continuously for about 15 minutes. This is not the kind of dish that you just leave on the stove simmering...You need to be fully engaged.
Next add the lemon juice, zest, and shrimp, and continue to cook, adding the broth, until the risotto is cooked, but remains slightly firm to the bite.
Remove from the heat, add the butter and the parsley. Serve in individual bowls, garnished with additional lemon zest.
Buon Appetito.
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