I'm With Stupid!

Mkts marched in place yesterday...with the clear exception of Equifax (EFX) which continued its descent in the early morning...down more points early on...only to close down 2 after a number of media outlets questioned whether or not the action was overdone....

Overdone?  Dude - you ain't seen nothing yet (Does Valiant mean anything to you?)  ....the stock is down 31% since the news broke last week.....no matter that the massive breach of data happened 7 weeks ago......(that's a whole other story..).....  The stock is now trading at the February 9, 2016 prices....and that's only because the bell rang at 4 pmyesterday......Looking at the chart - if that even has any relevance in this situation - next stop might be $65 ish.....(Although street analysts are have this stock rated a BUY with a $149 price target).......Look - this IS a problem...this breach has put nearly every single adult American in danger....and yesterday word had it that cyber security experts were able to 'crack the code' (think simple guesswork - nothing even remotely complex)   from Equifax's South American site (Argentina).   You should know that Equifax made a statement letting us know that they 'acted immediately to remedy the situation'....REALLY????   So this isn't about a missed earnings estimate or pressure on margins.....this story is about STUPIDITY.  Period. 

Everyone in the C suite should be held accountable....no exceptions.  Congress is set to hold hearings on October 3rd and the star witness?  CEO Ricky Smith.....this is going to be like a replay of  the WFC disaster only months ago when then CEO John Stumpf was in the hot seat.....do you remember that?  The arrogance?  Recall how employees who were uncomfortable about 'committing fraud' were fired....and told that

'They would end up working at McDonald's'. 

Now - I am not a Senator Lizzy Warren (Dem - MA) fan by any stretch...but she is known as a champion of consumers......and she has fangs.......I hope Ricky is ready....and this is sure to bring a wave of new regulations  - clearly something that EFX and the management committee needs to understand......

OH...and those stock sales made by those members of the C suite in August - after the attack but before the reveal??    I don't think so.........were those guys wearing those T-shirts that say

"I'm with STUPID"  ?

Or could that have been that stupid?   I mean you can't make this up.....who would believe it?

Ok - so Yesterday's eco data was a bit stronger than expected...CPI came in at 1.9% vs. the 1.8% expectation......putting us closer to that all elusive 2% target.....FED Fund futures immediately spiked...going from a 39% probability of a rate hike to a 55% probability of a hike in December.....and that kept the mkt in check.....I still don't think it is happening..... 

And then at 6 pm last night - Chubby (Kim Jung On) decided to make a fuss (again) and launch a missile over Japan towards Guam......now the missile went about 2700 miles before plunging into the Pacific Ocean - but that is not the point.....The point is - he is like a petulant child that needs to be punished....and the rest of the world is acting like parents that threaten and threaten and then never follow thru....only giving him more power......Japan immediately protests strongly and calls for an immediate UN Security Council meeting that will take place this morning.  

And this morning - terrorists blew up a London Subway station.....so far 18 people are on their way to the hospital while the Mayor of London - Sadiq Khan - calls for calm......And the world turns.....

US futures which were relatively flat - are now down 3.5 pts......as the sun rises.....Eco data today includes Empire Manf of 18, Industrial Prod of +0.1%, Capacity Util of 76.7%.......and finally Retail Sales of +0.1% - ex autos and gas of +0.5%. 

Today is also a quadruple witching day....an event that happens 4 times a yr when we have the simultaneous expiration of 4 sets of options.  Volume will be extremely high and early indications will be big on one side.....that is until the contra side comes in and pairs it off in line.....It's a whole lot of nothing really.....Expect big volumes on the open and then again on the close as investors roll these positions. 

European mkts are  weaker on the back of  Chubby's missile launch and the subway attack in London.   Yesterday's BoE statement did indicate that rates there are on their way up - at some point - not defined........ FTSE -1.19%, CAC 40 -0.13%, DAX -0.0%, EUROSTOXX -0.14%, SPAIN -0.42% and ITALY -0.10%. 

Expect lots of chatter about Chubby and the next move.....the mkts will respond in kind as that conversation takes shape.   Look for resistance at 2500 and support at 2475.....

Oil is trading higher  - WTI  breaks $50/barrel.    Gold is off 2 pts - which suggests that a move into the safe havens is not happening just yet.....

Rigatoni w/Mushrooms and Sauteed Vidalia Onions 

This is a great recipe and one that you can tinker with if your prefer.  The basic ingredients include:

Vidalia Onions, sliced Portobello, Chanterelles, Button and Oyster mushrooms, Olive oil, garlic, shallot, fresh shredded Pecorino Romano Cheese and s&p.  You can whip this up in about 45 mins or so….and it is better the next day – so make extra!

Bring a pot of salted water to a rolling boil. 

Combine 2 diced shallots, and 3 chopped Vidalia onions 3 sliced garlic cloves  with some olive oil in a large sauté pan.  (One that will be able to hold the pasta when ready.) 
Stir to coat well  - season with s&p and turn heat to simmer – cover and cook for about 35 mins…stirring occasionally.  You want the onions to be that nutty brown color – almost caramelized.  About 20 mins into it - add the mushrooms and another shot of olive oil - raise the heat and cook - do not burn.  Taste and adjust the seasoning.  Return to simmer.
10 mins later add the pasta to the water and cook for about 8 mins or until aldente….   

When the pasta is done – strain – always reserving a mugful of the pasta water to use.  Add the pasta to the sauté pan with the onions and mushrooms – stir to coat well.  Add back some of the pasta water to moisten.   Add a handful of shredded Pecorino Romano – and toss. 

Buon Appetito.

The market commentary is the opinion of the author and is based on decades of industry and market experience; however no guarantee is made or implied with respect to these opinions. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of O’Neil Securities, Incorporated or its affiliates.