Put in Perspective!

Ok...no matter what - Apple set the tone for the day yesterday -.....taking the tech sector down with it....It was the not only the disappointing earnings and the continued declining revenues, it was also the forward guidance that ignited the reaction. ...and that reaction hit the broad mkt right out of the gate...the Dow opened DOWN 100+ pts while the S&P got hammered as well - trading down 12 pts in the first couple of mins of the day.  The S&P once again piercing support at 2144 as the clock ticked....

But in many ways - it was more of a knee jerk reaction......I mean look - Apple is Apple - it is herculean, it is the elephant in the room...and the decline in earnings, while not the trend you want to keep seeing, was expected.....street analysts did a good job of 'warning' the street in the weeks leading up to Wednesday's announcement - but traders and investors still took the stock up 6% since off the September lows creating new 2016 highs....the stock had returned 10.45% ytd as on Wednesday at 4 pm.....So - is there really a story here?  Put it in perspective - REVENUES WERE $46.9 BILLION and  NET INCOME WAS $9 BILLION......Apple isn't going away .......but it makes for a good story......

Next!  Good housing data or more smoke and mirrors??  the Commerce Department reported that new home sales were up 3.1% for September, coming in at 593,000.....Hold your horses......there is a little bit of 3 card Monty going one here.....and it seems to be a trend.....work with me here......last month the Commerce Department reported that August new home sales were 609,000......but in a slight of hand - in yesterday's report they quietly (and I say quietly, because if you just looked at the headline and did not refer back to the trend then you would have thought - 'Oh wow, Look at the housing mkt...')  REVISED the August report down to 575,000 (or a 5.5% reduction) so now yesterday's report of 593,000 new home sales appears to be a 3.1% INCREASE (BULLISH) when it would have been a 2.9% DECREASE (BEARISH) - which would have created a negative headline for new home sales....  I mean - like food - it's all in the presentation......but during this final days of the presidential election - it seems that the current administration would rather 'adjust any and all reports' for political purposes.....if they just cut last month's number they get to make this month's number appear 'better than expected' and BOOOM!  It's all good!

Now in the end - the mkt attempted to recover and rallied back to near flat on the day with the Dow actually UP 30 pts and the S&P down only 3.  Now the headlines this morning are funny  - The WSJ runs with:

"Dow Industrials Rise Despite Drag From Apple".....

.Yes, in the end the Dow 30 did rise.....but the headline ignores the better part of the day when the Dow was under assault......and remember the whole breadth story....the Dow is only 30 stocks - a far cry from a real representation of the US economy -

Remember - the DOW is a price weighted average of 30 significant and most highly capitalized stocks traded....it measures the daily price movements of only 30 of the largest American companies and is widely viewed as a proxy of the US economy...but this is 2016...the Dow was created in 1896 when there were only 30 total companies in the US.....Today there are thousands that trade and those thousands are the real representation of the economy...which is why the S&P 500 is clearly the better barometer...

The S&P is an index of 500 stocks that much better represent the fortune of the American economy.....it is a market value weighted average of 500 stocks that reflect the large cap universe

( lg cap are stocks with values > $10 bil, Mid Caps are stocks  between $2 - $10 bil and small caps are stocks < $2 bil - Mega cap stocks are those > $200 bil)

- so as you can see - the S&P is a better barometer of the health of the economy....

Ok...next up....the dollar continues to strengthen on the back of what is expected to be a rate rise next month....and as we get closer to that date - the dollar will continue to advance and this will put the pressure on the mkt.....On Tuesday - the dollar pierced $99......a level it has not seen since Feb....and while it may be good for us - it will cause a re-evaluation for mkts.....because a stronger dollar has large implications for the big multi-nationals...and since the mkt is pricing in a much more optimistic outlook - continued strength in the dollar will force investors to re-price based on a range of fundamentals and political/monetary policy. 

This morning US futures have now turned UP - they were weaker in early trading....and are +6 pts at 2140...as they kiss resistance at 2144.....It is another BIG day for earnings....BMY, CL. F, UPS, Alphabet, Amazon, LinkedIn.... I suspect that the mkt will test resistance at 2144 and if it succeeds then look for it to fail (again) at 2150.....There are also some eco events that could help the tone of the day... Durable Goods (E: 0.2%),  Jobless Claims (E: 255k) and Pending Home Sales (E: 1.0%)
 
  
Until we vote - the mkt will remain the 2135/2155 ish range.... no reason to explode (or implode) until we know what the next version of DC looks like.....will the Dems take the Senate along with the WH?  or will we all be surprised to see Donald & Melania making the trek down Pennsylvania Avenue on their way to 1600?
 
and Deutsche Bank....the nailed it.....announcing better than expected revenues and earnings.......now while the stock did initially trade about 3% higher - it has since backed off and is trading flat.....as CEO Cryan continues to sell the story of a turn around....but the legal issues remain...and that is causing so many to remain on the sidelines....

Oil is up small - WTI trading at $49.40 while Brent is trading at $51.40.....continued speculation around what happens next and if supplies will end up being disrupted in November......My guess - not so much - which will keep oil in the $45/$55 trading range....based on the day.....
 

Take Good Care
KP

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White Wine Braised Pork Chops

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This is an easy recipe, takes a little amount of time.  For this you need:

4 pork chops on the bone - about 1 inch thick......you can use lean boneless - but why?  Bacn drippings (you can also just brown them in olive oil if you prefer - but the bacon fat does give it a whole different flavor) , flour, s&p, chicken broth, dry white wine, sliced sautéed onion.....
Season chops with s&p.

In medium sauté pan sear the pork chops slowly on both sides in hot bacon fat. Remove chops from pan. 

Next - add some flour to the bacon fat - making sure to stir constantly so that you avoid the lumps.....do not overdo it....just enough to thicken it...... Really no more than 1 tsp.....at most. 

Put the chops back in - flip so that you get both sides covered....now add in the chicken broth and white wine...equal parts of each.  Layer the sautéed onion on top - season again with s&p and cover...allow to simmer for 30 mins or so...depending on thickness.....

Prepare a green vegetable with this - maybe broccollini - sautéed in garlic and oil season with s&p.  Make a large mixed salad with tomatoes, red onions, croutons, cucumbers.  Squeeze a fresh lemon - season with s&p, oregano....toss with balsamic and a splash of olive oil....
 

 
Buon Appetito.