Kenny Polcari
KennyPolcari.com
**I am out the balance of the week - I am the Keynote speaker at the IPPFA (Illinois Public Pension Fund Association) Conference in Lake Geneva, WI.**
_______________________________________________________________
Who remembers the old Batman TV show? Remember when Batman and Robin were taking on the Joker, The Penguin, Mr. Freeze, Mad Hatter, The Riddler or even King Tut - do you remember how they showed the fights? Words like POW, BOOM & SMACK appeared in bubbles on the TV screen -.....the fight was left to the viewers imagination.....and so ladies and gentlemen - that is what it appears to be today with the mkts.......
It's all about your imagination as words like GLOBAL WEAKNESS, CHINA, INTEREST RATES, QE, STIMULUS flash across computer screens causing stocks to jump yesterday sending the S&P, the DOW and the Nasdaq higher for the 5th straight day....
Ok, look - The last week is another example of a manipulated mkt......traders feel forced to buy stocks to cover short bets as the media and the industry celebrates the weaker macro data and new evidence of economic weakness.....Celebrate? Why yes - because that means that the FED (and the ECB, BoJ and PBoC) will all come to the rescue (again) in one way or another. Stocks rallied yesterday on the rumor or chatter that the FED has to delay raising interest rates even as they tell us how appropriate it is to raise rates in October or December, but the most recent readings on the U.S. economy and global economy appear now to force the Fed to wait until 1Qtr of 2016.
[Just to add another notch in the belt - Yesterday we learned that the ISM Service sector report missed analysts expectations - although to be fair - it IS still in expansionary mode - but so many took the opportunity to accentuate the negative which then translates into a positive for risk assets....]
And did you see that the treasury sold a 'new gov't security' with a 3 month yield of ZERO for the first time in history? Ok...so just so we understand - investors gave the gov't a 3 month FREE loan......no interest, Here! - just take it. See the Money and Investing Section of today's WSJ -
"Yield of 0%, a First at 3 -Month T-Bill Sale"
As the article points out:
"The result reflects diminishing expectations in financial mkts that the Federal Reserve would raise short-term rates before year end after Friday's disappointing jobs report...."
And so - the prospect of loading up the punch bowl with more 'Kool Aid' creates demand for 'riskier assets' and this sent both stocks and commodities higher......
Technically speaking we can expect more volatility in the weeks ahead as we enter earnings season.... We have seen how analysts have slashed estimates and repositioned themselves ahead of what is likely to be a volatile couple of weeks.
Last night we learned that Ellen Kullman - CEO at DuPont (DD) is the first casualty of this 'hurricane season'. News out last night that she is 'retiring' (convenient) just as her company slashed its profit forecast - (dollar strength, global weakness...blah, blah, blah) and the activist investor, Trian, boosted its stake in the company - citing Kullman's failure to meet her targets..... Remember that Trian - owned by Ed Garden and Nelson Peltz - wants to break up the company saying that the parts are worth more than the sum of its whole. The stock is trading UP $2 or 4% in pre-mkt trading.....
This morning Pepsi (PEP) announces a surprise earnings report : $1.35 vs. exp of $1.26....which is contra to what the expectation was.... Revenues of $16.3 bil vs exp of $16.1 bil and they are on track to deliver $5 bil of productivity savings thru 2019 and return $9 bil to shareholders this year.....the stock is trading UP 3 pts (3%) at $98.57/sh.
Later today we will hear from YUM Brands - and on tomorrow afternoon - we will hear from Alcoa (AA).
On a side note Uncle Benny (Bernanke) took to the media circuit yesterday - announcing the publication of his new book - "The Courage to Act" . In this book - Benny discusses what went wrong and what went right during the GFC of 2007/2015 and counting......He points his finger at corporate executives saying that:
"It would have been my preference to have more investigation of individual action, since obviously everything that went wrong or was illegal was done by some individual and not by an abstract firm."
He also acknowledges that so many were slow to realize just how serious the crisis would become and he 'faults himself for not doing more to explain to Americans why it was in their interest to rescue the financial firms that had helped cause it'.
And finally he calls out a defective congress that 'failed to do its part' in helping to navigate the turmoil that engulfed this country - turmoil that caused untold hardships and crisis on so many Americans - The book is available today on Amazon and is a must read for anyone interested in how close the country was to financial Armageddon.
Overnight Asian mkts were mostly higher due to the news that the TPP (Trans Pacific Partnership) agreement seems to be finished. This trade deal among the US and 11 Pacific Rim countries has been called 'the biggest of its kind in a generation' and is supposed to yield global benefits of $300 bil by the year 2025. This deal though - still needs final approval from Congress....HSBC analysts had this to say about the deal:
"An accord among countries representing a large swath of the global economy sends a positive signal worldwide.....increased mkt openness via trade policy reform on this scale can promote growth in a manner that compounds".
We can only hope....Japan +1%, Hong Kong -0.1% and ASX +0.3%.
In Europe - mkts are now higher after being lower all morning. German Factory Order fall 'unexpectedly' raising the risk that Europe's largest economy is vulnerable to a weakening China.....The rebound that we have seen of late has been on the back of the idea of more stimulus....vs. on an improving economic outlook. So - is the move really sustainable? I guess we are about to see.....as earnings season is about to begin in Europe as well....so the devil is in the details...FTSE -0.04%, CAC 40 + 0.72%, DAX + 0.81%, EUROSTOXX +0.65%, SPAIN +0.73% AND ITALY + 0.31%
US Futs are off 4 pts.....that is after they were 10- pts lower earlier....this should not surprise anyone - after yesterday's rally to resistance at 1990 ish. Expect the news to be about DD, PEP and YUM today as more of the details emerge over leadership and results. Banks begin next week and those will surely set the overall tone for the broader mkt. No eco reports to speak of, but there are two FED speakers that will hit the circuit today. Kansas Fed Ester George at 9:15 am and San Fran's John Williams at 3:30 pm.
I suspect that the mkt will trade tight as it digests yesterday's move and dissects the DD, PEP and YUM news.....as it looks for the next catalyst to determine mkt direction. Look for resistance at the 50 dma at 2000 and support at 1950.
Veal cutlets - pounded thin, homemade Italian style breadcrumbs, arugula, tomatoes, red onion and bocconcini.
You begin with pounded veal cutlets. rinse under cold water and pat dry with paper towel. dredge the cutlet in flour, then dip in egg wash (scrambled eggs before you cook them)....then cover in the homemade Italian style breadcrumbs* and set aside.
When completed - heat up olive oil in a baking dish under the broiler...(.being careful to watch as the oil will ignite if it gets too hot before you begin cooking. ) Dip one side of the breaded veal cutlet in the hot oil and flip to the other side and broil - 3 to 4 mins. While broiling prepare the Cappriciosa salad for the finishing touch.
You can use whatever works for you - arugula, spinach, romaine etc. chopped red onion, diced tomatoes and quartered pieces of bocconcini (small mozzarella balls). season with s&p & oregano - refrigerate.
Flip the cutlet and broil the other side. When done remove from oven and place on center of warmed plate. Remove salad from fridge - drizzle with olive oil and fresh lemon juice and toss. Using tongs - "dress the cutlet" with the Capricciosa salad and serve. Outstanding.
*Homemade Italian style breadcrumbs - In a food processor - blend a bag of hamburger rolls (or hot dog rolls) and transfer to a bowl. Add pepper, onion powder, garlic powder and some parsley for color. The key ingredient is 3 or 4 handfuls of grated pecorino romano cheese. Do not add salt...the cheese will make up for any salt you think you need. Mix well and set aside.
Enjoy the weekend.....
Buon Appetito.
_______________________________________________________________
Who remembers the old Batman TV show? Remember when Batman and Robin were taking on the Joker, The Penguin, Mr. Freeze, Mad Hatter, The Riddler or even King Tut - do you remember how they showed the fights? Words like POW, BOOM & SMACK appeared in bubbles on the TV screen -.....the fight was left to the viewers imagination.....and so ladies and gentlemen - that is what it appears to be today with the mkts.......
It's all about your imagination as words like GLOBAL WEAKNESS, CHINA, INTEREST RATES, QE, STIMULUS flash across computer screens causing stocks to jump yesterday sending the S&P, the DOW and the Nasdaq higher for the 5th straight day....
Ok, look - The last week is another example of a manipulated mkt......traders feel forced to buy stocks to cover short bets as the media and the industry celebrates the weaker macro data and new evidence of economic weakness.....Celebrate? Why yes - because that means that the FED (and the ECB, BoJ and PBoC) will all come to the rescue (again) in one way or another. Stocks rallied yesterday on the rumor or chatter that the FED has to delay raising interest rates even as they tell us how appropriate it is to raise rates in October or December, but the most recent readings on the U.S. economy and global economy appear now to force the Fed to wait until 1Qtr of 2016.
[Just to add another notch in the belt - Yesterday we learned that the ISM Service sector report missed analysts expectations - although to be fair - it IS still in expansionary mode - but so many took the opportunity to accentuate the negative which then translates into a positive for risk assets....]
And did you see that the treasury sold a 'new gov't security' with a 3 month yield of ZERO for the first time in history? Ok...so just so we understand - investors gave the gov't a 3 month FREE loan......no interest, Here! - just take it. See the Money and Investing Section of today's WSJ -
"Yield of 0%, a First at 3 -Month T-Bill Sale"
As the article points out:
"The result reflects diminishing expectations in financial mkts that the Federal Reserve would raise short-term rates before year end after Friday's disappointing jobs report...."
And so - the prospect of loading up the punch bowl with more 'Kool Aid' creates demand for 'riskier assets' and this sent both stocks and commodities higher......
Technically speaking we can expect more volatility in the weeks ahead as we enter earnings season.... We have seen how analysts have slashed estimates and repositioned themselves ahead of what is likely to be a volatile couple of weeks.
Last night we learned that Ellen Kullman - CEO at DuPont (DD) is the first casualty of this 'hurricane season'. News out last night that she is 'retiring' (convenient) just as her company slashed its profit forecast - (dollar strength, global weakness...blah, blah, blah) and the activist investor, Trian, boosted its stake in the company - citing Kullman's failure to meet her targets..... Remember that Trian - owned by Ed Garden and Nelson Peltz - wants to break up the company saying that the parts are worth more than the sum of its whole. The stock is trading UP $2 or 4% in pre-mkt trading.....
This morning Pepsi (PEP) announces a surprise earnings report : $1.35 vs. exp of $1.26....which is contra to what the expectation was.... Revenues of $16.3 bil vs exp of $16.1 bil and they are on track to deliver $5 bil of productivity savings thru 2019 and return $9 bil to shareholders this year.....the stock is trading UP 3 pts (3%) at $98.57/sh.
Later today we will hear from YUM Brands - and on tomorrow afternoon - we will hear from Alcoa (AA).
On a side note Uncle Benny (Bernanke) took to the media circuit yesterday - announcing the publication of his new book - "The Courage to Act" . In this book - Benny discusses what went wrong and what went right during the GFC of 2007/2015 and counting......He points his finger at corporate executives saying that:
"It would have been my preference to have more investigation of individual action, since obviously everything that went wrong or was illegal was done by some individual and not by an abstract firm."
He also acknowledges that so many were slow to realize just how serious the crisis would become and he 'faults himself for not doing more to explain to Americans why it was in their interest to rescue the financial firms that had helped cause it'.
And finally he calls out a defective congress that 'failed to do its part' in helping to navigate the turmoil that engulfed this country - turmoil that caused untold hardships and crisis on so many Americans - The book is available today on Amazon and is a must read for anyone interested in how close the country was to financial Armageddon.
Overnight Asian mkts were mostly higher due to the news that the TPP (Trans Pacific Partnership) agreement seems to be finished. This trade deal among the US and 11 Pacific Rim countries has been called 'the biggest of its kind in a generation' and is supposed to yield global benefits of $300 bil by the year 2025. This deal though - still needs final approval from Congress....HSBC analysts had this to say about the deal:
"An accord among countries representing a large swath of the global economy sends a positive signal worldwide.....increased mkt openness via trade policy reform on this scale can promote growth in a manner that compounds".
We can only hope....Japan +1%, Hong Kong -0.1% and ASX +0.3%.
In Europe - mkts are now higher after being lower all morning. German Factory Order fall 'unexpectedly' raising the risk that Europe's largest economy is vulnerable to a weakening China.....The rebound that we have seen of late has been on the back of the idea of more stimulus....vs. on an improving economic outlook. So - is the move really sustainable? I guess we are about to see.....as earnings season is about to begin in Europe as well....so the devil is in the details...FTSE -0.04%, CAC 40 + 0.72%, DAX + 0.81%, EUROSTOXX +0.65%, SPAIN +0.73% AND ITALY + 0.31%
US Futs are off 4 pts.....that is after they were 10- pts lower earlier....this should not surprise anyone - after yesterday's rally to resistance at 1990 ish. Expect the news to be about DD, PEP and YUM today as more of the details emerge over leadership and results. Banks begin next week and those will surely set the overall tone for the broader mkt. No eco reports to speak of, but there are two FED speakers that will hit the circuit today. Kansas Fed Ester George at 9:15 am and San Fran's John Williams at 3:30 pm.
I suspect that the mkt will trade tight as it digests yesterday's move and dissects the DD, PEP and YUM news.....as it looks for the next catalyst to determine mkt direction. Look for resistance at the 50 dma at 2000 and support at 1950.
Veal Milanese Cappriciosa
This dish takes about 30 mins from start to finish so no excuses -Veal cutlets - pounded thin, homemade Italian style breadcrumbs, arugula, tomatoes, red onion and bocconcini.
You begin with pounded veal cutlets. rinse under cold water and pat dry with paper towel. dredge the cutlet in flour, then dip in egg wash (scrambled eggs before you cook them)....then cover in the homemade Italian style breadcrumbs* and set aside.
When completed - heat up olive oil in a baking dish under the broiler...(.being careful to watch as the oil will ignite if it gets too hot before you begin cooking. ) Dip one side of the breaded veal cutlet in the hot oil and flip to the other side and broil - 3 to 4 mins. While broiling prepare the Cappriciosa salad for the finishing touch.
You can use whatever works for you - arugula, spinach, romaine etc. chopped red onion, diced tomatoes and quartered pieces of bocconcini (small mozzarella balls). season with s&p & oregano - refrigerate.
Flip the cutlet and broil the other side. When done remove from oven and place on center of warmed plate. Remove salad from fridge - drizzle with olive oil and fresh lemon juice and toss. Using tongs - "dress the cutlet" with the Capricciosa salad and serve. Outstanding.
*Homemade Italian style breadcrumbs - In a food processor - blend a bag of hamburger rolls (or hot dog rolls) and transfer to a bowl. Add pepper, onion powder, garlic powder and some parsley for color. The key ingredient is 3 or 4 handfuls of grated pecorino romano cheese. Do not add salt...the cheese will make up for any salt you think you need. Mix well and set aside.
Enjoy the weekend.....
Buon Appetito.
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