The Bets are Lining Up

Stocks mostly stable yesterday - after an early morning temper tantrum...as they tried to pressure stocks lower....Oil - broke $80 and the chatter heats up.....OMG - Oil breaking $80? The mkt will get crushed!!! Is that really a reason for panic? I mean - is anyone shedding a tear for the oil producers? Is anyone shedding a tear for OPEC? This is NOT a demand issue at all - it is an oversupply of oil - thanks to the efforts of the US to become a major player in the world oil mkt....
This morning's WSJ headlines with:

"Gas at $3 Carries Rewards - and Risks"

Come on....really? Will it really slow the US energy boom or is the industry just creating fear and panic to hold up prices? Yes - the higher prices may have driven the energy boom - so now just deal with it....start to tighten it up, cut some of the waste - isn't that what they told the financial services industry to do when technology and new rule sets caused a massive shift in the industry? Cut the FAT.

In the end - the global consumer and the global economy comes out the winner. With oil prices down 25% we have seen some of the oil producers get whacked - SLB down 33% , HAL down 30% , and BHI down 32% from their highs... Are these companies going out of business? Hardly.....so it looks to me like there is a SALE taking place on Wall St. Opportunities like this are like presents under the tree....

Back to the action - stocks ended up churning after finding support around the 1950 level on the S&P. The macro data indicated that services sector activity reached a six month low in October and Texas manufacturing activity cooled according to the Dallas Fed Survey. This was offset by a 0.3% gain in pending home sales (although below the 1% estimate).....in the end - volumes were a bit muted as Investors/traders seem to be sitting on the sidelines waiting for the Fed to speak on Wednesday - detailing the latest view on the economy, but more importantly - what is the next move on interest rates......

The FED will end its QE program by withdrawing the final $15 bil/month that they have been pumping into the system....but recent evidence (or chaos) of a global slowdown, especially in Europe, may see them stop and pause for further reflection before raising rates. Any such indication will see the mkts rally even further and the dollar come under some pressure........ and this morning - US futures are shooting higher - currently +10 pts as investors/traders place their bets...

Watch the reaction of the US dollar - which has been rallying for some time on growing expectations that interest rates will rise sooner rather than later as the economy improves. The dollar index (DXY) has been trading well above its 50 and 200 dma's - and has not pulled back and tested those key tech levels for support...Will any sense of lower rates for longer cause the dollar index to pull back or has the mkt already discounted lower rates thru Fall 2015?

And a stronger dollar will do what to the commodity complex? (read OIL and GOLD). Oil we have already discussed....and now Gold has tested critical support at $1225 on 3 occasions over the past two years.

Technically, gold will need to stabilize and break through its 50 dma at $1241 and then test resistance at $1285.....failure to do so will signal another leg down...... Will global central banks turn on the printing presses to give Gold the assist?

I am thinking that the financial markets are in a holding pattern until Wednesday - and then again until after mid-term elections. (They do not want another meltdown in the next two weeks). Although there are some analysts that think the FED will extend the stimulus for another couple of months - I am not in that camp...I think they will move ahead and call it quits wrapping up its asset purchase program and promising the markets that interest rates will remain low for longer until such time that there is more clarity on the state of the global economy.

After the bell last night - TWTR reported got crushed after missing on profits projections....currently the stock is down 12% or ($6) trading at $42.66. This morning look for earnings from AET, DD, GLW, PFE and WHR to name a few.

On the economic front - we get Durable Goods - exp of +0.5%, Ex transports of +0.5%, Consumer confidence of 87 and the Richmond Fed Survey - exp of 11.

US futures continue to trade higher - currently +10 as the mkt will test the 1975 level today on the S&P.....Today's macro data should offer more support on a slowly improving economy - just enough to justify the end of QE, but still weak enough to justify low rates until 3Q 2015.

Thick Cut Pork Chops in Champagne

For this you need: Pork Chops (on the bone are always better), s&p, olive oil, shallots, fresh sliced mushrooms, thyme, tarragon, Champagne, flour and whole milk.

In a large sauté pan heat up the olive oil and a dab of butter - over med-hi heat. Season pork with s&p. Add to the sauté pan let cook for about 2 - 3 mins per side (depending on thickness)- you want them nice and golden brown.

Remove pork from pan and set aside.
In the same pan add diced shallots and sauté....until soft. Now add mushrooms and sauté for another 5 mins....Add about 2 tsp of thyme and 1 tsp of tarragon. Stir. Next - here comes the Champagne - add and deglaze the pan for about 1 mins....

In a sep bowl - whisk together 1 tblsp of flour to 1 cup of milk - add to pan. Put the pork back in the pan, cover and simmer for 3 - 5 minutes, until pork is fully cooked and the sauce thickens.

Present this dish on a bed of mashed potatoes topping the chop with the champagne, mushroom cream sauce. A large mixed salad served with a champagne vinaigrette works great.


Buon Appetito.