China Disappoints (Again), Greece Implodes, US Futures Flat

As the sun makes it way around the world - it sheds light on so many concerns....

In Asia - stocks tumbled on disappointing Chinese manufacturing data - The Caixin China PMI (Purchasing Manf Index) for July was a disappointing 47.8 - lower than the expectation of 48.2 AND below the 'official' gov't figure of 50 released over the weekend.....(recall a reading below 50 indicates a contractionary environment) and today's read marks a 24 month low. This news weighed on Asian mkts - Japan -0.18%, Hong Kong -0.91% and China -1.1%, Taiwan -1.63%, KOSPI -1.07%, (ASX closed for the day) - yet it is not causing European mkts to implode.

By now - the China story is getting a bit long in the tooth - so many analysts and strategists have been calling for the 'slowdown' - and now as it plays out investors are re-pricing the risk. What is interesting to note is that the Chinese mkt is down 30% from the highs - BUT found support at the long term 200 dma trend line....It first tested that support tin early July- bounced then tested again last week and again today.....This will be important to watch - as it details investor comfort - a break from here could see that mkt fall another 10% before finding support at the January/March trading range.

European mkts though appear to be discounting the China story - at least for today - as they concentrate on the earnings story and the release of manufacturing PMI's. As expected German and EMU PMI's beat the estimates and remain in expansionary mode......Spain, Italy, France also reported good enough numbers causing investors to focus on the broader European recovery.

Today marked the re-opening of the Athens stock exchange and even that disaster has done little to rattle European investors. Now I say that because it was NOT pretty. The headlines detail the disaster -

"Greek Stocks Plunge on Reopen as Investors Flee Ravaged Economy"

"Europe Slightly Higher, Greece Plummets on Open"

After having been closed for 5 weeks - the opening bell finally rang in Athens and investors had a chance to re-think investing in Greek stocks.....and it seems that most have little to no interest in staying.....Waves of selling by anxious investors causing that mkt to plunge by 23% - Greek banks took it the hardest - some falling better than 30% before regrouping - currently that mkt is still lower by 17% or some 135 pts.

Remember 25% of Greeks are unemployed, banks have been weakened, manufacturing is at record lows, capital controls remain in place, the economy appears to be circling the drain, and new austerity measures will only create new and possibly more painful hardships on their economy and on so many citizens - any hope of a rapid recovery is nothing but a pipe dream....yet friends of mine that just returned from Greece told me that unless you knew all of this information - you wouldn't realize it - It seems to be business as usual. FTSE +0.66%, CAC 40 + 0.56%, DAX + 0.70%, EUROSTOXX +0.68%, SPAIN +0.63% and ITALY +0.46%.

US S&P futures are flat right now....- investors seem to be taking it all in stride.....It will be a busy economic data reporting week. - Today we get Pers Income (+0.3%) and Spending (+0.2%), US Markit PMI of 53.8 - that would be a strong reading indicating expansion - Construction spending of +0.6%. Later in the week we get ISM NY, Factory Orders of +0.7%, IBD/TIPP Eco Optimism index of 47.6, ADP employment report of +210k and Friday's NFP report - expected to show +225K jobs created. Unemployment to remain the same at 5.3%. Now again much attn will be paid to wages and avg hourly earnings to help Janet and the Fed determine future policy.

Commodities continue to come under pressure - much of it due the 'weak' China data - oil toying with the $46.50/barrel level.....Iran said to be able to increase production within one week after sanctions are lifted. Industrial metals also under pressure (China again) and resource rich countries suffer by default. Gold, Aluminum, Copper, and Nickel all lower....and the Thomson Commodity Index now testing new lows.....You have to begin to wonder - is it the 'herd mentality' ? Just sayin.....

With all of this negativity around us - the broader mkt is still trading closer to all time highs than not. We closed Friday at 2104 on the S&P - just 1% off the highs.......A far cry from the disaster that so many have been screaming about. The S&P seems to have found support right here....now the DOW is a different story...- having broken all 3 levels of support - the picture does remain a bit cautious....

We are coming to the end of earnings season and as usual so far about 70% of companies met or beat expectations.....guidance has been a bit challenged but investors are punishing those specific names vs. the broader mkt. The good news is that investors are once again focusing on the improving economy. Support remains at 2100 - any break here would cause the algo's to test longer term support at 2068....

If today's action does not cause that to happen with China and Greece all the rage - then it would seem that the focus is returning to the broader recoveries in Europe and the US. I suspect we will remain the broader trading range of 2068/2125 until we get more direction from the FED. Until then the macro data should shed light on the thinking.



Take Good Care
KP

Pork Chops 'Benevento Style'

So Benevento is a city in the region of Campania in the South Eastern region of Italy. Benevento is 50 km northeast of Naples. and sits atop a hill with a beautiful view of the valley below and is at the cross section of the Sabato and Calore Irpino rivers. It borders Molise and Puglia and is fairly mountainous, providing some unbelievable photo opportunities. It is also a region of that country where so many Italian Americans can trace their heritage - It is off the beaten path but well worth the visit if you happen to be in the area.

Fennel is the key ingredient in this dish and it grows like wildfire in Campania and so you will find so many of their cooking to reflect that.

For this you will need:
1 in thick pork chops, s&p, flour, olive oil, fennel seeds (about 1 tblsp), garlic, dry white wine, water and a beef bouillon cube.

Preheat the oven to 300 degrees.

Season the chops with s&p and then dredge in flour.

Now in a large sauté pan and one that can go in the oven - heat up[ the olive oil - when hot - add the chops browning on both side - maybe like 1 min per side. Next - remove the pan from the heat and sprinkle the fennel seeds on one side of each chop then turn and repeat. - now place the chops and the pan in the oven for about 12-15 mins.

When done - remove the pan from the oven and place the chops on a large serving platter. Cover with foil to keep warm.

Now place the sauté pan back on the stove over med heat - add 2 crushed garlic cloves and cook until just brown. Now add in 1/2 cup of the white wine and 1/2 cup of water- being sure to deglaze the pan and scrape up any of the browned bits on the bottom. Now crumble the bouillon cube into the pan and stir - until the sauce has reduced by 1/2. Remove the garlic and spoon the sauce over the chops and serve immediately.

Enjoy this with a large cold mixed green salad with red onion, tomatoes. Dress with s&p, oregano, fresh lemon juice and olive oil. Toss and serve.

Buon Appetito.