Kuroda Says Not so Fast and the ECB Leaves Rates Unchanged

Morning Thoughts

 

So Donald Trump & the RNC have a message for Uncle Teddy Cruz - who sounded more like a whiny little kid than a Jr. Senator from the Great State of Texas..........It hails from the 1976 song that was written by Peter Allen and made famous by- Melissa Manchester - It goes something like this:  "Don't Cry Out Loud.."

"Baby cried the day the circus came to town, ' cause 'he' didn't want parades just passin by him......Don't CRY out loud,  Just keep it inside, learn how to hide your feelings.  Fly high and proud and if you should fall, remember you ALMOST had it all...."

Ted Cruz's performance last night at the RNC only goes to show you that 'Teddy' remains a loner and as Lt. Gen Michael Flynn pointed out on twitter last night - "Ted Cruz demonstrated he is willing to place himself before country"....Words like shameful, selfish, bitter, reprehensible,  and disgraceful come to mind... - but that's another story......Politics is a dirty game - but you gotta love when the loser gets up and there and cries out loud......

And the smoke and mirrors continues.....Anything Tech had a banner day....the XLK (Tech ETF) makes another new high - closing at$45.80, the DJ Software Index also enjoyed the benefits of better earnings.....surging by 3%  taking that to its highest level since before the Dot Com bubble crash in 2000..... as investors celebrated the earnings surprises from MSFT, QCOM and INTC -

Yes -  the party continues as these three stalwarts impress investors with their 2Q results.....handily  'beating the street' - causing traders/investors to scoop up some stock.. ...Now not to be a complete party pooper - does it matter that both MSFT and INTC chose to use generally 'unacceptable' accounting gimmicks to shift expenses and revenues to past or future quarters to 'massage' the current qtr?   I mean what's with the 'adjusted numbers'?  What happened to the 'real numbers' - Oh right - the real numbers would have painted a less than pretty picture and instead of 'beating the street' they would have been 'beaten by the street'......but alas - where else is an investor to go in a flat to negative interest rate environment?   I mean look - who doesn't love a BULL mkt?

Financials also continue to go along for the ride after MS 'beat the street' as well...Many of the other sectors continue to do the churn as the broader mkt struggles with the trend line resistance at 2175......Notice that yesterday morning - we discussed how the mkt was attempting to push up and through - yet it just didn't feel like the momentum was behind it....and in fact - pushed up, kissed resistance and backed off a bit as investors await more central bank news.....And we are starting to get that news in fits and starts.....

In Japan - the Nikkei continued to rise as the excitement builds over the widely expected BoJ (Bank of Japan)  'helicopter style' monetary stimulus program......Reports of a stimulus program of some 20 tril Yen ($188 bil) to 'help' the domestic economy fend off any negative effects of BREXIT continued to permeate the headlines.....pushing that index up 0.75%....... Now - BoJ Governor Kuroda kept his mouth shut until after the mkt there closed...revealing that 'There is NO need and NO possibility for helicopter money'  BUT he did make clear that the BoJ still has other options including further negative interest rates....  so mkt interpretation of these comments in Asia will have to wait untiltomorrow....

In Europe - investors are awaiting the latest news out of the ECB (European Central Bank) concerning monetary policy in light of the BREXIT vote 3 weeks ago......The bank is expected 'preserve its ZIRP' stance.....(Zero Interest Rate Policy) - beyond that - the mkts will continue to focus on earnings.....currently all European mkts are in slightly negative territory...

Now here at home - US futures are off 3 pts.....as the 1275 trend line is proving to be a bit of a Achilles heel......and while earnings continue to surprise us - the mkt has already discounted those better than expected results by rallying some 9% off of the late June lows....We will get more eco data this morning - including the Chicago Fed Survey - exp of -0.2%, Init Jobless Claims of 265k, Cont Claims of 2.13 mil, the Philly Fed Survey of 4.5. and Existing Home Sales which are expected to show a DECLINE of 0.9%......

Earnings so far this morning are all looking good - BBT (BEAT), BNY (BEAT) , JCI (BEAT), DHI (BEAT), DOV (BEAT), PHM (BEAT), TRV (BEAT) so far only PPG (MISSED) and CFG (MISSED)....but the day is young.....look for T, PYPL, SBUX and V to report after the closing bell.

The FED is finally standing up and telling lawmakers that they can't do it alone for much longer - citing changing demographics, negative productivity and 'other long term factors'.......Bullard makes it very clear.......

"stimulus is something you do or try to smooth things out over a couple of quarters and that isn't how we need to be thinking about the US economy - we badly need a growth agenda."  

Are you kidding me???  Bullard says this now? and 'smooth things out over a couple of qtrs?   How does he define a couple of qtrs - because it has been 28 qtrs so far......(2009/20016 = 7 yrs x 4qtrs/yr = 28 qtrs and still counting).  And to add salt to the wound - he isn't alone now.....guess what....those other members of the FED are now all starting to call on DC to get off their arses.......!  Remember in June - Janet told congress that elected officials have failed the nation because fiscal policy had 'not played a supportive role...'

I mean you can't make this up...who would ever believe it???
Look for the S&P to continue the churn as it struggles with 2175 on the upside while finding support at the 2150 level......
 

Take Good Care
KP

 

 

Potatoes & Eggs

Comfort food for an unsettling time - This is one of those basic yet classic dishes that never goes out style...you can eat for breakfast, lunch or dinner - Enjoy.

For this you need:  Eggs, potatoes, garlic, onion,  s&p, butter, olive oil, fresh grated Parmegiana Cheese and if you prefer a pinch of Italian seasoning.  
Preheat the broiler (oven) to high.

Peel a couple of russet potatoes and then slice - now toss into a pot of boiling water - bring the pot back to a boil and blanch for 3 - 5 mins....Remove - strain and set aside.
In a large bowl - crack 6 to 8 eggs - Beat well - add a splash of whole milk (or 1/2 & 1/2), season with s&p (and if you like a pinch of the Italian seasoning). Add a handful of grated cheese.  Mix well - set aside.  

In a large oven safe frying pan - melt a dab of butter, add a squirt of olive oil and heat.  Now add in chopped garlic and sauté.  Next add some sliced onions and sauté - until soft and golden.....add back the potatoes and brown on both sides. Next - pour the egg mixture into the pan and allow to set.  Twirl the pan to allow the egg to spread and cook.   Once the edges begin to pull away - place the pan into the oven under the broiler.....Watch as it quickly cooks the top of the "frittata".  Remove and slide onto a large serving platter - cut like a pizza.  

Have toasted slices of Italian bread on the table for your guests to make a sandwich.  Serve with Ice Cold whole milk.    


 
Buon Appetito.