Stumpf gets Toasted and Warren's Head Explodes - Futures Under Pressure

Mkts were quiet yesterday - this morning it is different - futures are under pressure as we approach daylight in NY.....but first - let's have a laugh....I mean - you gotta laugh......

BREAKING NEWS – Johnny Stumpf the former CEO at Wells Fargo is TOAST – NowHERE is where board gets to say "Bye Felicia" to this dummy.....In a good bye statement he had the nerve to say :

"While I have been deeply committed and focused on managing the Company through this period, I have decided it is best for the company that I step aside”

First of all – I call BS!  Dude STOP!  You didn't retire - you got your a*s thrown out!(and rightly so....and you should kiss their feet for not taking away your $100 mil of WFC stock, your $24 mil of pension benefits as well as healthcare for the rest of your life.... - but THAT is another conversation.....)  If you think that anyone believes that this was your decision – then you are just as delusional as Loretta Mester is when she says the economy is strong enough for a November 2^nd rate hike!  Come on!!! The board could not throw you out fast enough….in fact – I am quite surprised that it took them this long –  

The news sent Elizabeth Warren's (@SenWarren) head to go exploding off her shoulders as she convulsed into a FRENZY – unable to control herself – like Trump (@realDonaldTrump) and Hillary (@HillaryClinton)  – she has taken to Twitter to vent her anger!  Here we have three 70 yr olds -  Warren, Trump and Clinton going head to head trying to blow up the twitter sphere.   You gotta love it! I mean you can’t make this up – who would believe it?

Next up - The US finally got 'a set' of ........ (you fill in the blank)  and fired back at Yemen for the recent multiple attacks on US Navy ships in the Red Sea - You see - in case you missed it over the weekend - while we were being sidetracked by the latest Trump video and the 2nd debate - our US Navy was being attacked by Houti Rebels in Yemen....But why would we know that? Why would THAT have been important to discuss at the debate vs. the sexual exploits of one of the current candidates as well as a former President?  I mean - not sure about you - but I am just about done with who is pulling down whose pants and helping themselves to whatever they think is theirs....

And so the Trump campaign has now launched the Scorched Earth strategy in a campaign that appears to be in intensive care..... 

Wikipedia defines The Scorched Earth strategy – as ‘a military strategy that targets anything that might be useful to the enemy while advancing through (or withdrawing from) an area’

And Scorching the Earth  – right under the noses of EVERY elected politician on Capitol Hill is some strategy.....… You see - yes - He has tapped into an anger in America and honestly – this election cycle has brought out the absolute worst in American politics…In fact – I do believe that we are the laughing stock of the free world – but that is another story….In the end though – it will be interesting to see how this strategy plays out and how the mkt interprets it…..Are the polls wrong?  Are people being honest when they say that they would never vote for Trump?  I mean in some way – would a Trump win serve to send a message to DC that we are done with the give always and the socialist ideology?    Will this election be the 21^st century version of the ‘civil war’ in this country?

Now speaking of polls - there has been another NBC/WSJ poll (released yesterday) and again it showed Clinton way out in front of Trump....ok- that might have been fair if the poll wasn't tainted.....You see - what you don't know is that the poll was conducted by Geoff Garin ( President of Hart Research) AND a “strategic adviser for priorities USA in support of Hillary Clinton’s election.” This organization was paid $220K in September by Clinton’s campaign.  Now - They just happened to poll heavily Democratic locales and BINGO like clockwork the results say "Hillary is in the lead".  Are you kidding me???   Did you expect her to pay for a poll that showed she was losing???  Come on!!!  Can you imagine if Trump conducted a presidential poll by using a super PAC that was also advising his campaign, while polling mostly Republicans???   I could go on and on..but what's the use?

Back to the mkts.....yesterday was dominated by the release of the FED mins - and did we really learn anything new - NO!  We learned that Yellen 'made the difference' in what is described as a close call....At 2:00 pm the FED released the news.....

"At their Sept. 20-21 session, the Federal Open Market Committee voted 7-3 to leave interest rates unchanged. Minutes released Wednesday showed “several” of those who supported the decision to wait on tightening policy said the decision was a “close call.” Several also indicated it would be appropriate to raise rates “relatively soon.”

Now as Omair Sharif - Sr. US Economist for Societe Genrale ( not that handsome actor that played Dr. Zhivago in 1965)  told us:

"I don't think it a 'Let's stay on hold for six months to a year ....Let's hold our fire for two more months so we can make a little progress on discouraged workers." 

But we must ask - what is Relatively soon?  What exactly does that mean?  It is so open ended....depending on who you are will depend on what you hear....and some heard November while others heard December....because  following the release,  the chances of a December hike went to 70% while the chances of November hike remain at about 17%.   I think FOX Business lit the fuse and ran with a headline that suggested November - and to that I say - Baloney.....Again - Yellen is NOT raising rates 6 days ahead of the election...and if you really want something to chew on - think about this:

She needs to get Hillary elected, Global debt is now $152 tril, commercial bankruptcies are at record highs, Deflation is rampant in some parts of the world, Europeans are going to the polls across the continent - Italy, Portugal, Spain, Austria, Hungary, Czech Republic and the list goes on,  China (like cities across America) has a real estate bubble going on, global stocks are artificially elevated based on global central policy initiatives and inflation in this country and around the world is still non-existent.......so even a December hike is dangerous....but she HAS to do something.....and my sense is that if Trump wins onNovember 8th - then the FED will hike rates on November 9th - just because!  If Hillary wins - then there will be a re-evaluation about even December.....

Now yesterday action was a non-event - in fact we could have been closed and no one would have noticed...but this morning the story is different.....all the players are back at their desks and they don't like what they see.  US futures are getting smacked again...currently down 11 pts  - The HSBC - RED ALERT is causing some stir in the mkts......the headline says it all -

"Get Ready for a 'Severe Fall' in the stock market" - 

Warning signals all over the place....as Murray Gunn uses the Elliot Wave Principles in determining mkt action.....In late September he issued an 'Orange Alert' and has now upgraded to 'RED status. 

 In fact after Monday's action - I said that if we did not hold intermediate support at 2138 - then we would be looking to test a new trading range of 2070 / 2140 and this morning it looks like this may be true.  If the mkt does not bounce back before 9:30 then look for the S&P to open at or near 2128 (Monday's lows) and then test the will of the bulls......a failure here will then cause a swift move lower...Now HSBC calls for 2116 - I say - it may pause there - but a test of long term support at 2070 is more likely....

Eco data today includes: Init Jobless Claims of 253k and Cont Claims of 2.05 mil....Tomorrow's data is much more relevant....Retail Sales - exp of +0.6% and PPI of +0.6%....
Overnight - China reported SOFT eco data and surprised the mkts.....Their trade balance missed by a wide margin.....Exports down 10%  (exp of -3.3%) while Imports fell 2% (exp of +0.6%) and while one report does not set the trend - this miss does serve to remind investors and central bankers of the 'peripheral macro risk'. 

European mkts are under pressure as a result of  that and the coming earnings season....FTSE - 0.7%, CAC 40 - 1.3%, DAX - 1.3%, EUROSTOXX - 1.3%, SPAIN -1.1% and ITALY - 1.2%.
 

Take Good Care
KP

Osso Bucco

 Veal Shank “Osso Bucco”   What a great dish! - Thick, meaty, delicious....if done right - it falls right off the bone and melts in your mouth........Osso bucco: is a specialty in Milan.  It  is made with carrots, celery, onions, garlic, S&P, lemon zest, red wine, beef broth and tomato paste..  You prepare it in the afternoon and then let is slow roast in the oven for hours......try it…it is wonderful.

 First rinse the shanks and pat dry....dredge in seasoned flour – (here you can use GF – gluten free - flour) and then brown in a frying pan with heated olive oil.....making sure that you keep the heat on high to sear the outside while trapping all of the juices inside....After you have browned the meat - place in a roasting pan - making sure not to crowd them too much.....At this point - chop (not dice) chop, the carrots, celery and onions....crush 4 / 5 garlic cloves and spread the garlic and veggies over the meat. Add lemon zest on top - not to much - but enough so that you know it’s there.
 
Back to the frying pan - deglaze with red wine, add beef broth and a can of tomato paste (not puree) paste. Stir - bringing to a boil - then reduce heat and let thicken a bit - all of 4 mins or so.........if need be - add a bit more beef broth - then add this mixture to the roasting pan - making sure that you bathe the shanks in wine/beef broth. Cover tightly and place in a 325 degree oven for at least 4 hrs.....when ready....take a look, smell the wonderful aroma, notice how it fills the kitchen and permeates the house.....

 When done - remove 1/2 of the veggies and puree. Place some of the pureed veggies in the center on a warmed plate and then place a veal shank on top of that. Next - take some of the remaining veggies and circle the shank.  You should serve this with a nice onion risotto or even creamy mashed potatoes....
 Have your guests take a seat, light the candles, turn on some nice dinner music to fill the room.   Try this with a Brunello di Montalcino - it's like velvet and always works nicely

  
Buon Appetito.