Central banks continue to take starring roles, provide a floor under the markets

Global mkts yesterday ended mixed – US stock fell hard right out of the gate only to regain lost ground to close on either side of the unchanged mark – S&P +1.76, Nasdaq +0.12, the Russell +0.63 while the Dow ended down 19 pts.

Investors must balance the mixed macro data as they try to position themselves for the FED meeting next Tuesday. The increasing geopolitical tensions – highlighted by the 13th anniversary of the 9-11 and the Obama speech on Wednesday night – pledging to remain vigilant and relentless in our campaign to destroy ISIS (Islamic State of Iraq & Syria) as he continues to build a coalition of international strength and the new EU and US sanctions being imposed against Russia were just some of the reasons being bandied about to explain the low volumes and lack of volatility.

In Russia - the tensions continue to simmer but I don’t think these will prove to be the catalyst for any real correction…..Look – while Putin in not backing down as he enjoys his surging popularity (in Russia) – he will need to find a way to negotiate while not losing face – as those sanctions begin to kick in and the Russian economy struggles.

In the Mid-East – tensions have been have been in play for centuries (at least it feels like that) coupled with the recent call for that ‘relentless’ campaign to destroy the enemy may cause some ‘uncomfortableness’. Yes the US is taking action – with the supposed support of KEY middle east allies – Saudi Arabia and Jordan – but the jury is still out and its effectiveness still unknown – so it remains a bit of a wild card.

At the global macro level – central banks continue to take all of the starring roles and will remain supportive – further providing a floor under the mkts. HELLO???? Anyone home?

Last week it was the ECB – and this morning it is more ECB as we meet the newest member of the cast – Erkki Liikanen – a Governor of the Bank of Finland (BoF) and a member of the ECB governing council re-iterating to CNBC that they stand ready to take further measures – take a listen -

"What we have also said that at the same time and reiterated that if there will be a prolonged period of low inflation, which is of course very harmful for the European economy, we are unanimous in our commitment to take new measures if necessary. And it's important to say that our commitment to price stability is intact…..I don't doubt our capacity to act. What's important is that the ECB must be able to act in all circumstances, that's why we have decision- making systems which guarantee it."

In Japan – many economists think it is only a matter of time before they unleash a new round of fresh stimulus – as their most recent program has helped to bring down the YEN while restoring more confidence in their economy – Why – you ask? It sounded pretty clear in the statement released by Gov Kuroda when he said:

“If the BOJ’s price target became difficult to achieve, we are prepared to adjust policy and won’t hesitate, whether this is additional easing or something else”.

And here at home - it is worth pointing out that Yellen has chosen to remain dovish as she focuses on the ‘risks to the downside’ specifically the slack in the labor mkt. Last week's weak NFP report, yesterday’s increase in Initial Jobless Claims, mixed regional FED surveys coupled with Wednesday’s San Francisco’s FED survey that suggests that the average American isn’t buying this recovery and is convinced that the FED will need to remain accommodative only further complicates the mood.

Although there is plenty of US macro data scheduled to be reported next week – let’s not forget the coming of BABA – That is Alibaba – and it is scheduled to price this IPO on Thursday evening – 9/18 – and begin trading on the NYSE on Friday 9/19 as they bring some 320 mil ADR’s (American Depository Receipts) to the mkt – raising some $160 bil in the most eagerly awaited IPO of the late summer season. Wall St banks – Barclays, GS, CSFB, MS, DB, JPM, C all trying to convince fund managers that at the expected pricing of $60/$66/share - it's a bargain...in fact they note that at his proposed price - it represents a 20% discount to Tencent Holdings and a 31% discount to Facebook.....and I say this because? Because as the WSJ points out - those same fund managers and bankers expect the mkt to correct this 'mis-pricing' once trading begins - sending the stock surging..... OH...and think of the fees that this transaction is generating......– Can you say Merry Christmas?

US futures are down by 1 pt in what is expected to be another quiet day. The S&P continues to struggle to remain in the 1970/2000 range as investors continue to interpret the data – Retail sales are expected to show a surge at 0.6%....and if so - expect the talking heads to once again throw in the 'rates could rise earlier than expected' conversation....REALLY???

Is there anything that should really cause investors to change their mindset? Not so much. If sales are stronger - will that cause the mkt to sell off as we move into the weekend as traders reduce exposure and take some money off the table? Maybe some – but not enough to cause any panic. Rates are not going anywhere anytime soon.

Overnight in Asia – mkts were mixed. The Chinese reported that credit grew in August - Aggregate financing – a measure of credit in China that includes bank loans and lightly-regulated trust products funded by retail investors – rose in August hinting that Beijing is allowing banks to lend more freely amid a property market slowdown. Japan +0.25%, China -0.17%, Hong Kong -0.27% and ASX -0.27%.

In Europe –The Scottish vote for independence happens next week – look for a rally in the pound if the vote fails. Listen - while Scotland has been beating their chest over independence – can the country really afford to really break away from the UK? Today the IMF jumped into the conversation saying that a Yes vote in next week’s referendum could lead to mkt turbulence. (Now that is a stunning observation) - William Murray an IMF spokesman said that

“The main immediate effect is likely to be uncertainty over the transition to potentially new and different monetary, financial and fiscal frameworks in Scotland,”

FTSE +0.23%, CAC 40 – 0.04%, DAX -0.23%, Eurostoxx +0.03%, SPAIN +0.28% and ITALY +0.24%.

Grilled Swordfish Siciliana

A great dish from the heart of Palermo.

For this you need: Raisins, green olives, capers, pignoli nuts (pine nuts), tomatoes, garlic, onion, s&p, olive oil and the swordfish. This dish is easy to make - it will tease your senses - and tickle your pallet - only takes about 15 or 20 min's to prepare and 20 min's to cook....enough time to set the table, pour the wine, light the candles, put on the music and dim the lights.....

Light the grill and then preheat oven to 400 degrees.

Season the swordfish with s&p.

Next soak the raisins in warm water for about 1/2 hr... drain and set aside.
Heat the olive oil in a sauté pan on med high heat....sauté the diced onion and crushed garlic until soft. Do Not Burn. Maybe like 5 / 8 min's....add raisins, diced tomatoes, chopped olives (no pits!), and capers - like 1 tblspn. (If you like capers feel free to add a bit more - but not too much as the taste will overpower the dish). Reduce heat to simmer and cover...stirring occasionally....for about 15 min's or so...

Place the swordfish on the hot grill and sear on one side for 2 mins...now flip it over to quickly sear the other side - 2 mins....Now remove and place in a baking dish and cover the fish with the raisin/olive/caper/tomato mixture - bake for 10 min's or until the steaks are firm.....(depends on the thickness)

Present the fish on a warmed plate with steamed green beans and a large mixed green salad with red onions, cucumbers, grape tomatoes, maybe some fresh mozzarella....dress with s&p, oregano, a splash of fresh lemon juice, balsamic vinegar and olive oil.


Buon Appetito.