Draghi Assures Con't Stimulus
|On Wednesday - Oil surged at one point by 4.5% to close up 2.7% - on an unexpected draw DOWN - On Thursday - Oil retreated by 2.3% on a stronger dollar and concern over whether or not OPEC and the other nations will actually really cut supply at their next meeting in November - causing concern for the mkt....and then AXP earnings - which were reported after the bell on Wednesday and which 'blew the roof off the house' - could also NOT ignite the excitement investors/traders needed to push the mkt higher....At one point - AXP was trading up 10% as investors celebrated the good news.... -
Now look - Wednesday night - the stock closed at $61.25 - as it struggled to pierce it's down trending 200 dma at $61.92......sellers and shorts have been pounding the stock since early September - taking some 11% out of the stock......sending it plunging thru all 3 technical supports (now making them resistance levels) as the investors voted with their feet....
Then on Wednesday evening, after the bell - AXP stuns the investment community - reporting earnings of $1.24 vs. the 0.96 ct expectation.....and like clockwork - the stock exploded to the upside - punishing all of the 'non-believers'......
For anyone that was long the stock it was a good day - but for those on the other side of that trade - shorts (those betting against AXP) it was not a good day for them - in fact their need to cover only gave the bulls more ammunition as sellers pulled back forcing anyone that wanted to buy stock to have to pay up...... Now that being said - the gap in prices created by yesterday's move will need to be filled - so if you missed it yesterday - be patient - you will get a chance to get in.....
At 8:30 am yesterday we all heard from ECB Pres -Uncle Mario (Draghi) and as expected - we heard nothing really...he did not change policy and he did not indicate clearly what will happen in March 2017 - when this program is supposed to come to an end. Now does anyone think that he will just come to a full stop on March 31st? I mean - after his 2 tril investment - do you expect him to just take his ball and go home? Come on! That is NOT happening....so what is?
What is - is that he left the door wide open.....maybe he extends the current program, maybe he begins to taper - but we won't know that until his December meeting.....In fact what I find funny is that he said that
"policy makers hadn't even discussed whether to extend the banks 80 billion Euros /month bond purchase program"
REALLY?? The very existence of the Eurozone rests on his lap and he is NOT discussing the future of the program? Is it me?
Now clearly - as we get closer to March - investors want and need to know how to play it.....if the ECB begins to normalize - like they say they will do here at home - then assets will need to be re-priced, just like here....if they extend the program then the party can continue for a while longer - sound familiar?
Speaking of policy - while the FED is still talking up a hike in December - is it a hard and fast fact that it is happening....apparently not.....could it depend on who wins the WH?
If the Republicans take the WH then Janet may raise rates on November 9th - and create financial turmoil for Trump, but if the Democrats take the WH - then she may re-consider the December target date and push it out until early 2017....to give Hillary a chance to get her feet wet.....And if that happens then expect screams from the audience - as the FED is supposed to be a non partisan central bank - agnostic to whatever party is in power and since they have been trying to convince us that the economy is ready - it would be hard for them to reverse course without losing ALL credibility.....so sit tight my friends.....and stay thirsty....
US futures are now DOWN 6 pts in early trading.... The dollar which has been on a tear is up again this morning vs a basket of our major counterparts.... The dollar index is up 4.5% off the September lows - precisely when the FED started the chatter of a rate increase...and apparently overnight Draghi squashed any discussion of a March Tapering - sending the Euro lower vs. the dollar...
Oil is essentially flat right now - after Putin did pledge his support for efforts to limit production...but Nigeria in outright affront to the group - Slashed the price of every type of oil they produce in order to boost their global mkt share.... Gold down $1 is struggling to hang onto support at $1269/oz....it too remains confused over the direction of global monetary policy....a rate increase in the US will cause pressure on gold while continued stimulation in Europe will cause gold to rally - so what will it be? Oh it is a tangled web we weave...
Today we will hear from MCD's, GE, STI, HON, CZN to name a few.....So far - GE, CZN and STI have all BEATEN the estimates and futures only continue to WEAKEN.....now down 8 pts.....intermediate support on the S&P is still 2142 - and last night we closed below that at 2141 - and if futures remain weak - then look for the S&P to trade down to 2134 on the opening..... a test of Monday's low 2125 could easily happen - but a test of last week's low of 2115 is not out of the question.. While this morning's earnings reports are positive - the mood feels heavy...capisce?
Look for FED Governor Daniel Tarullo to speak at 10:15am at the Columbia Law School conference while San Fran's John Williams will speak at the Fed Home Loan Bank conference at 2;30 pm.
There are no eco reports today - so the action will revolve around earnings and investor sentiment. European mkts are lower - not much but they are in the red....
Take Good Care
KP
Penne in Pumpkin Cream w/Sweet Sausage
Here is a favorite Fall/Thanksgiving first course.....You can't go wrong with this....
This recipe came to me from my dear friend Margaret. This is a great Fall dish.
For this you need: 1 lb penne (or any pasta of your choice), 4 links Italian sweet sausage, casings removed, 1 cup chopped onion, 2 cloves garlic, olive oil, ½ cup white wine, 1 bay leaf,1 cup chicken broth, ¾ c of pumpkin canned (libby - not the pie filling!), ¼ c fresh sage (opt), s&p, ground cinnamon to taste, Dash nutmeg, ¼ c heavy cream, ¼ cup fresh parmegiana.
Bring a pot of salted water to a boil.
Brown the sausage in a large frying pan. Remove. Add the onion and garlic and a splash of olive oil. Add wine and bay leaf. Bring to a boil. Cook until liquid is reduced by half.
Stir in the pumpkin, half the sage and all the remaining seasonings. Cook a little longer about 2 minutes. Add the cream and sausage. Heat through. Remove the bay leaf.
Drain pasta - reserving a mugful of the pasta water - and return to the pot and add the sausage mixture. Toss to coat. Add a bit of the pasta water to moisten. Sprinkle the cheese. Serve in warmed bowls immediately.
Buon Appetito.
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