Kenny Polcari
KennyPolcari.com
So the Turks caused a bit of a stir early on yesterday.... As we now know at about 4 am (est) they blew a Russian jet fighter out of the sky over the Syria/Turkey border - claiming a violation of Turkish airspace............images of that fighter jet on fire and spinning towards earth were caught on Twitter, FB, and every media channel across the world.......Questions arose.....explanations demanded......Vlad was not happy at all ......and the rhetoric coming out of Moscow caused early global anxiety for the mkts... Europe suffered one of their biggest one day losses while US Futures went from positive to negative in the blink of an eye......
How could this have happened? We were all playing nice - coming together to take out ISIS and now this? Who made THAT decision? Mkts assumed the worst early on (as they usually do) in a knee jerk reaction........Now this is not over yet - but world leaders did come together to try and assuage the situation......to try and get Vlad to simmer down.....Look - it IS a war zone.....S**t happens.......
Futures pointed to a lower open.....Selling dominated the action in the mins and hours after the opening bell rang..... I mean this latest event only adds to the escalating tensions in that part of the world....... But as the day wore on, and the rhetoric got toned down a bit, and world leaders tried to 'manage' this latest ' blunder' - Investors/traders began to tip toe back into the water.....taking back the early losses, and when the sellers did not push back - the mkt ended the day just a bit higher - teasing 2090 on the S&P.
That being said - we saw a bit more of the 'spinning top pattern' - as we discussed yesterday....making this the 4th consecutive day of essentially churning.....going sideways......doing nothing really as we head into the Thanksgiving holiday. Now despite yesterday's gain the sideways “spinning top” pattern over the last four sessions only suggests there may be further downside ahead...but that does not mean today or this week.....
Typically - this is a good week for stocks....traders/investors always seem to take the mkt higher during this holiday shortened week......and this morning - US Futures are pointing higher.....currently +5 pts....European mkts are all substantially higher as investors there chose to put the geopolitical concerns behind them and focus on the deluge of US 'data' due out today and next week's ECB ( European Central Bank) policy meeting....
As you might have expected - oil, gold and other commodities did well yesterday.... Gold showing substantial strength - rose $7 or 4.5% bouncing off what appears to be a bottom at the $1065 ish level...........Energy names and defense names also leading the way (makes sense in light of the geopolitical events yesterday) .....airlines, leisure & travel stocks got slammed, but today - all that has changed.....Oil in off a bit - ahead of the IEA forecast that is expected to show a build in oil stockpiles...... while in Europe - the expectation is that next week Uncle Mario (Draghi) will announce a new plan to help stimulate their economy....so - it's a new day!
Yesterday we also learned that 3rd Qtr GDP was revised upwards! The report said REAL GDP (I love when they say that - what would you expect FAKE GDP?........mmmm Be careful.......) climbed by 2.1% in the 3rd qtr compared to the previously reported +1.5%. The revision matched economist estimates so no surprise there at all. BUT - hold on.....the Conference Board released a separate report showing a substantial deterioration in consumer confidence in the month of November - that was NOT expected.....The Conference Board said its consumer confidence index fell 9 pts to 90.4 in November from 99.1 in October. This drop did come as a surprise to economists, who had expected the index to climb to 99.6....so that just confirms that the data continues to be mixed at best.....
Today we will get slammed with a boatload of US macro data.....Mortgage Apps came in at -3.2%, The rest of the data is expected to show:
Personal Income of +0.4%, Personal Spend of +0.3% and then you get REAL Pers spending of +0.2% (What is not REAL about personal spending? If you are spending REAL money then you are spending money - there is nothing not REAL about spending money.... so why the extra stat? Just creates a bit more confusion and another way for the gov't to spin the story). October Durable Goods are expected to show an increase of 1.7% - up dramatically over Septembers read of negative 1.2% (or a 2.9% reversal) , Durable Goods ex Transports to show +0.3%. Markit US Services PMI (Purch Managers Index) to show a slight gain at 55.1. New Home Sales are expected to be up 6.8% m/m and U of Mich Cons Confidence to remain steady at 93.1.
Trading activity should slow down today, volumes are expected to be light - which though can exaggerate a move in either direction....I suspect that move will be higher today....UNLESS some dope does something stupid again. With futures up 5 in pre-mkt trading and European mkts up substantially - FTSE +0.95%, CAC 40 + 1.4%, DAX +1.5%, EUROSTOXX + 1.17%, and ITALY + 1.24% - the tone appears to be set to allow the mkt to test 2100 on the S&P.....if it successfully pierces that then a move to the most recent highs of 2115 would be an easy lift....remember - Friday is a 1/2 day....moves can be magnified......so - many PM's, traders etc.....are away from the office and have set both BUY and SELL orders at levels that would create opportunity no matter which way the mkt reacts...
Expect to hear all about Black Friday sales records on Monday... But sales records mean nothing if prices have been cut to the bone to achieve those 'records' - think margins..........I'm just sayin.......
Have a happy Thanksgiving - and remember - WE have a lot to be thankful for - We live in a great country, We have a democracy and the right to challenge conventional thought, we have the joy of freedom and the love of family. (And anyone can run for President). Make that the focus. Be well.
Enjoy
How could this have happened? We were all playing nice - coming together to take out ISIS and now this? Who made THAT decision? Mkts assumed the worst early on (as they usually do) in a knee jerk reaction........Now this is not over yet - but world leaders did come together to try and assuage the situation......to try and get Vlad to simmer down.....Look - it IS a war zone.....S**t happens.......
Futures pointed to a lower open.....Selling dominated the action in the mins and hours after the opening bell rang..... I mean this latest event only adds to the escalating tensions in that part of the world....... But as the day wore on, and the rhetoric got toned down a bit, and world leaders tried to 'manage' this latest ' blunder' - Investors/traders began to tip toe back into the water.....taking back the early losses, and when the sellers did not push back - the mkt ended the day just a bit higher - teasing 2090 on the S&P.
That being said - we saw a bit more of the 'spinning top pattern' - as we discussed yesterday....making this the 4th consecutive day of essentially churning.....going sideways......doing nothing really as we head into the Thanksgiving holiday. Now despite yesterday's gain the sideways “spinning top” pattern over the last four sessions only suggests there may be further downside ahead...but that does not mean today or this week.....
Typically - this is a good week for stocks....traders/investors always seem to take the mkt higher during this holiday shortened week......and this morning - US Futures are pointing higher.....currently +5 pts....European mkts are all substantially higher as investors there chose to put the geopolitical concerns behind them and focus on the deluge of US 'data' due out today and next week's ECB ( European Central Bank) policy meeting....
As you might have expected - oil, gold and other commodities did well yesterday.... Gold showing substantial strength - rose $7 or 4.5% bouncing off what appears to be a bottom at the $1065 ish level...........Energy names and defense names also leading the way (makes sense in light of the geopolitical events yesterday) .....airlines, leisure & travel stocks got slammed, but today - all that has changed.....Oil in off a bit - ahead of the IEA forecast that is expected to show a build in oil stockpiles...... while in Europe - the expectation is that next week Uncle Mario (Draghi) will announce a new plan to help stimulate their economy....so - it's a new day!
Yesterday we also learned that 3rd Qtr GDP was revised upwards! The report said REAL GDP (I love when they say that - what would you expect FAKE GDP?........mmmm Be careful.......) climbed by 2.1% in the 3rd qtr compared to the previously reported +1.5%. The revision matched economist estimates so no surprise there at all. BUT - hold on.....the Conference Board released a separate report showing a substantial deterioration in consumer confidence in the month of November - that was NOT expected.....The Conference Board said its consumer confidence index fell 9 pts to 90.4 in November from 99.1 in October. This drop did come as a surprise to economists, who had expected the index to climb to 99.6....so that just confirms that the data continues to be mixed at best.....
Today we will get slammed with a boatload of US macro data.....Mortgage Apps came in at -3.2%, The rest of the data is expected to show:
Personal Income of +0.4%, Personal Spend of +0.3% and then you get REAL Pers spending of +0.2% (What is not REAL about personal spending? If you are spending REAL money then you are spending money - there is nothing not REAL about spending money.... so why the extra stat? Just creates a bit more confusion and another way for the gov't to spin the story). October Durable Goods are expected to show an increase of 1.7% - up dramatically over Septembers read of negative 1.2% (or a 2.9% reversal) , Durable Goods ex Transports to show +0.3%. Markit US Services PMI (Purch Managers Index) to show a slight gain at 55.1. New Home Sales are expected to be up 6.8% m/m and U of Mich Cons Confidence to remain steady at 93.1.
Trading activity should slow down today, volumes are expected to be light - which though can exaggerate a move in either direction....I suspect that move will be higher today....UNLESS some dope does something stupid again. With futures up 5 in pre-mkt trading and European mkts up substantially - FTSE +0.95%, CAC 40 + 1.4%, DAX +1.5%, EUROSTOXX + 1.17%, and ITALY + 1.24% - the tone appears to be set to allow the mkt to test 2100 on the S&P.....if it successfully pierces that then a move to the most recent highs of 2115 would be an easy lift....remember - Friday is a 1/2 day....moves can be magnified......so - many PM's, traders etc.....are away from the office and have set both BUY and SELL orders at levels that would create opportunity no matter which way the mkt reacts...
Expect to hear all about Black Friday sales records on Monday... But sales records mean nothing if prices have been cut to the bone to achieve those 'records' - think margins..........I'm just sayin.......
Have a happy Thanksgiving - and remember - WE have a lot to be thankful for - We live in a great country, We have a democracy and the right to challenge conventional thought, we have the joy of freedom and the love of family. (And anyone can run for President). Make that the focus. Be well.
Brownie a la Mode
I love this desert....but make sure you make the brownies right before you eat them....take them out of the oven when they are still slightly undercooked and serve them warm with your favorite Ice Cream, wet walnuts, hot chocolate sauce and warm marshmallow fluff.Enjoy
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