Piso Mojado?

The stock mkt is beginning to remind us of the famous Energizer Bunny - "it just keeps going and going...."

So all of that chatter out of GS 3 weeks ago about the risk of a brief sell off - did it in fact come true? Was the 4% move lower in the last 2 weeks the brief sell off that they were referring to? If so - kudos to the group of 11 strategists at GS that published the report known as the " Global Opportunity Asset Locator". In it - they noted:

"We are concerned that a selloff in government bonds will lead to a temporary selloff in equities in line with what we saw last summer, though the magnitude is likely to be smaller as the need for bond yields to correct is lower"

So - yes there was a 'sell off' (if you define a sell off as 4%) and yes it was smaller in magnitude (4% vs. 7%) so they got it right....hit that nail right on the head....

Tech stocks leading the way....Nasdaq setting a new 2014 high - as Investors don’t appear to have lost their appetite for 'growth' names like technology and biotechnology. Just to note - Apple made a new record high piercing $100/share post split. Whether Apple can maintain the momentum does however remain to be seen - but for now the mkt and investors/traders are getting themselves all excited for the IPhone 6, which will no doubt be another blockbuster launch for Apple.

While 'growth names' are surging higher - large caps and small caps remain below their 2014 highs...Will they play catch up or are they still signaling 'caution ahead' or 'Piso Mojado' (Spanish for Slippery when Wet)?

The burst higher from that 'sell off' two weeks ago is interesting right? The global tensions held responsible for the angst have dissipated - so traders/investors took advantage of lower prices and jumped back in - once investors get comfortable with the state of global affairs - then they will turn their attention back to the broader macro data - and yesterday's data did NOT disappoint.....and we are back to the premise that 'good news is in fact good news'. Eco data reported - set the tone early - CPI - came in almost flat - which allows for the continuation of ZIRP (zero interest rate policy).

Ok so let's discuss CPI - (Consumer Price Index) a read on inflation....the labor dept told us that CPI ticked up 0.1% in July.... Excluding food and energy it also rose 0.1%.....combine that with last week's PPI (Producer Price Index) and we find that the FED cannot use rising prices as a reason to normalize interest rates so BUY, BUY, BUY......

But look closer - The indexes for shelter, food, medical care, new vehicles, personal care, and apparel, education, all increased in July. While the index for airline fares, recreation, used cars and trucks, household furnishings and tobacco all declined in July.

So if you are flying, or going to the beach in a used car or need to buy a new couch while smoking - then you are all good.....You are loving the decline in prices....

But if you need to eat, live, drive to work, go to the doctor, wear clothes or go to school - then you are out of luck..... I'm just sayin.....no inflation - REALLY?

Next up was new housing starts....jumping 15.7% and building permits +8.7% - blowing the roof off the bus! Though multi-family housing represented the bulk of this improvement, single-family starts did rise by 8.3% as well. This as we are at the lowest home ownership rate in almost 20 years. Contrary to what this report tells us - Mortgage applications are at 6 month lows (disconnect). Yet the strength of this report suggests that US economic growth will be strong in the 3Q. Is this a case of 'build it and they will come?" As a result it was no surprise that Home Depot posted strong results which sent shares surging some 3%. Other housing names? Yup - moved higher - TOL +2.3%, LEN + 3%, KBH +2.5%, PULTE +1.5%.

This morning we are seeing stocks take a bit of a breather...futures are flat - not up or down - just flat as the mkt awaits today's FOMC mins...released at 2 pm. Will they really learn anything new? Doubtful. Expectations remain mostly dovish - and after the most recent macro data here at home along with weakening data in Europe - do investors really expect the mins to reflect a more hawkish tone?

Is there some downside risk? Of course - but small.....If anyone is expecting that these mins will reveal anything new - ahead of the Jackson Hole summit tomorrow and Friday, they will be disappointed. If anything - expect the mins to reflect some divergence of opinion among Snow White and the 7 Dwarfs - but in the end - it is what it is.....nothing new here.

US futures are flat - we seem to be hitting resistance here at 1980.....for now - I think the range is 1955/1980.....some consolidation after the surge is good.... With the S&P back up to a 7% gain ytd....the mkt needs the economy to verify and support the move. Eco data today- Nothing.....only the FOMC...so expect low volumes again.

European mkts a bit cautious also after the recent surge.....as investors/traders look to the US and any potential news about global central bank policy initiative coming from Jackson Hole. All mkts slightly lower.

Cavatappi w/Green Pea Pesto

The pesto sauce originated in Genoa which is in the Liguria region of Northern Italy. Liguria borders France, Piedmonte, Emiglia-Romagna and Tuscany.... and sits right on the coast of the Ligurian Sea. The hills lying immediately beyond the coast coupled with the sea account for a mild climate year-round. Average winter temperatures are 45 to 50 °F and summer temperatures are 73 to 75 °F. This makes it a very temperate place year round and as such remains quite popular.

Portofino lies on the coast just up from the capital of Genoa and is a destination for some of Europe's rich and famous. Today's recipe makes use of the mortar and pestle - The verb Pestare means to pound or crush - Pesto is the past participle of this verb. - The reference to pounding is because of the way they used to make it in a mortar and pestle - this is a tool that is used to crush/grind certain ingredients/herbs etc.....Now you can use the mortar and pestle or you can use the food processor - your choice.....and as you now know Pesto is usually made with garlic, basil, pine nuts, parmegiana cheese and olive oil.....(in other recipes - I substitute - basil for Arugula, Asparagus, or Broccoli and make pesto out of those ingredients) so today we are going to use Peas.

For this you will need: Frozen peas, Parmegiana cheese, 2 garlic cloves, splash of lemon juice, a bit of chopped basil, pepper (the cheese is salty enough) and olive oil.

First bring a small saucepan of water to a boil and add the peas...cook until the water reboils +1 min. Now strain....Blend all of the ingredients - taste - adjust if necessary then set aside.

Now bring a pot of salted water to a rolling boil and add the linguine (you can use any type of pasta you want - but I like linguine with this meal) - cook for 8 / 10 mins or until aldente...strain - reserving a mugful of the pasta water. Put back in pot and add back 1/4 cup of water to remoisten...stir....no puddle in the pan...capisce? Now add the pea pesto and toss. Serve immediately in warmed bowls. Always have extra grated cheese on the table for your guests. Again - this is a simple meal and easy to prepare. Enjoy it for what it is - comfort food.....