• Global markets under pressure – Gas shortages across the UK causing angst – brent pierces $80/barrel.

  • WTI following suit – now trading about $76/barrel up 23% since mid-August.

  • Jay Powell to explain to Congress why inflation is no longer ‘transitory’.

  • 2 Fed Presidents resign after revelations of massive gains in stock trading – Rosengren trying to deflect pointing to his kidney disease, Kaplan remaining hushed.

  • 10 Yr. Treasury now yielding 1.535% on its way to 1.8%?

  • Try the Pumpkin/Butternut Risotto (for Thanksgiving).

Global markets are under pressure this morning – European markets all down about 1+%, gas shortages across the region causing panic buying, price of brent crude oil piercing $80/barrel, (while WTI prices this morning are now above $76/barrel) some gas stations closed as they don’t have anything left to sell…..not because there is an oil shortage, but because there are not enough truck drivers to deliver the gasoline to the gas stations. (Think supply chain – truck drivers - issues).

US futures are pointing to a much weaker opening as well,  as investors continue to fight – bulls clearly tiring while bears appear to be on a rampage….The Senate GOP blocking a House passed bill that would prevent a gov’t shutdown on Friday and suspend the debt limit until December 2022 – that’s correct – their bill would suspend the debt limit for 14 more months……So now - the Dems are forced to suspend the debt limit on their own by combining it with their $3.5 Trillion budget reconciliation bill and jamming it down our throats.  Now – this is all very dramatic and political, and it only adds to the already anxious, negative tone – so it will cause some pressure on stocks in the days ahead – but remember – in the long term it will not price stocks…and while this is all very dramatic – everyone knows that this too shall pass.

And then at 10 am

FED chair Jay Jay Powell is due to appear before Congress today to detail the Fed’s economic response to the Covid 19 pandemic….and while he is there expected to hear more on why ‘transitory inflation’ apparently isn’t so ‘transitory’.  He is expected to tell congress that.

‘The causes of the recent rise in inflation MAY last longer than anticipated…. that while economic growth has continued to strengthen, it has been met with upward price pressures caused by supply chain bottlenecks and OTHER FACTORS’. 

And just what are those ‘OTHER FACTORS’…. Well, I’m sure you can guess – think massive amounts of stimulus and endless supplies of money for one……. It is as they say ‘time for the country to pay the piper’ – to bear the consequences of all of this ‘fun’ that we have enjoyed.   Hmmm…. maybe he just woke up from that dream he has been in….

And to that I would ask:  Are you kidding me?  Wait…. how long has he been saying that inflation is transitory and how long has there been a chorus of analysts/strategists (myself included) that have challenged that view?  And by the way – you should have known this was coming – Why?  Because I pointed it out in my note last week after his FOMC press conference – the word TRANSITORY was conveniently eliminated from his narrative – he never said the word TRANSITORY in his comments……yet no one in the media chose to focus on it…. conveniently they focused on how strong the recovery is allowing us to begin to taper (at some point).  Trying to accentuate the positive of a strong economy….

And then -

In addition many are also wondering if we will hear anything at all about yesterday’s TWO (not one, but TWO) Fed resignations…..Boston’s Rosengren for ‘health’ reasons (completely stepping away from his equity trading during his tenure), while Dallas’s Bobby Kaplan is stepping aside because of the WSJ front page story that detailed how Bobby was ‘trading’ his account and racking up million dollar gains….– buying and selling big name tech – Apple, Amazon and other FANG names, S&P futures, etc.…all while he was an active FED member – with all kinds of information and data that the rest of us did not have access to.  Interestingly though, both said that they would SELL the stocks in their individual trading accounts to ‘stop any inquiry’……. Funny how that happens just ahead of a FED taper?  I mean you can’t make this stuff up!  Who would ever believe it?

Not sure about you, but they used to call that ‘Inside Information’. In addition – both of those FED members are more ‘hawkish’ – which now means what for the FED?  Will they be replaced by equally hawkish members or more dovish members?  All this as we are about to taper.  Don’t think it’s happening this year….  

And so, it goes….and this morning as detailed – US futures are under pressure…. Dow futures down 115 pts, S&P’s down 30 pts, the Nasdaq down 200 pts and the Russell down 6 pts….

10 Yr. treasury yields which spiked higher yesterday on both economic optimism AND inflation fears – kissed and pierced 1.51% before settling back at 1.488% are now trading at 1.525% this morning on its way toward 1.6% before ending the year yielding 1.8+%.  The 30 year is now yielding 2.05% and 30 yr. mortgage rates are now back above 3.1%.... (Oh my!) And this will surely a cap on equites if not force a price revaluation.   The VIX (fear index) is up 9.5% as of 6 am this morning suggesting that it will be a volatile day…. all this as September ends…… And are you surprised? 

Yesterday stocks put in a mixed performance…. the Dow added 71 pts, the S&P lost 12, the Transports up 130 while the Nasdaq lost 77 and the Russell gained 33 pts as the struggle continues….

Eco data yesterday showed an increase in Durable goods – more than expected, Capital goods ordered and shipped both higher than expected and that speaks to the strength of the economy…which is good, but with that comes this nagging issue called inflation….and that is causing concern.  Today’s eco data includes Wholesale Inventories - +0.8%, Retail Inventories of +0.5%, Housing Price Index of +1.5%, and the Richmond Fed Survey of 10.

Bitcoin and Ethereum are both lower…. down about 2% this morning as the fight over crypto continues. 

The S&P ended the day at 4443 – and with futures lower this morning – we can expect to see it breach support again….and most likely look to test the lows of last week before the end of the month.  The lows of last week were 4300 – below the intermediate trendline….and that would not be out of the question at all.  I guess the only question now is – will that level hold or will we barrel through and test lower?   

Remember – I think the path of least resistance is lower. 

Pumpkin, Butternut Risotto  Served in Baked Baby Pumpkins

It is that time of year.... you see the pumpkins all around....it is fall, the air is brisk, and you need to consider this dish for your Thanksgiving table. Easy to make because you BAKE this one and it is delicious to eat......

 You will need:  Chicken Broth, Arborio rice, Butternut squash, 1 1/2 cups of pumpkin puree (not the pie filling that you buy in the store - you need real pumpkin puree), large, diced onion, chopped fresh basil, plenty of fresh grated Parmegaina Cheese, olive oil - and the kicker - 3 tbsp. of Mascarpone Cheese. –

(Mascarpone is a soft white cream cheese from the Lombardy region of Southern Italy.  It is the result of the culture being added to the cream skimmed off the milk used in the production of Parmegiana.  It has the consistency of soft cream cheese and is used in a variety of Italian dishes including deserts).

Preheat the oven to 400 degrees.

In a baking dish - combine the rice, cut up butternut squash, the pumpkin puree, diced onion, and the chicken broth.  Season it with a bit of s&p and mix well.  Cover it tightly with a lid or with tin foil and place in the middle rack in the oven.  Re-visit it in 10 mins intervals and stir.   It will be done when most of the broth has been absorbed and the rice is no longer hard.  This should not cook any longer than 40 mins max.

Remove from the oven and add - the Parmegiana, the Mascarpone and the chopped basil - mix well (but do not smash the butternut squash) and serve immediately in the baked baby pumpkins – see below.

Here is what you do.  Cut the top off the baby pumpkin.  Scrape out the insides (seeds).  Place a dab of butter inside – place in a roasting pan – with its top - with a bit of water in the pan and bake for no more than 20 mins.  You can do this alongside the risotto – You want them to be cooked but not so soft that they break apart when you add the risotto.  If you are making a lot of them – then you will need to do this separately….do the pumpkins first and serve with the warm risotto.

Now add 2 tbsps.’ of the risotto to the baked pumpkin - Serve with the top just askew.   Makes a great table presentation at your Thanksgiving table.

General Disclosures

Information and commentary provided by ButcherJoseph Asset Management, LLC (“BJAM”), are opinions and should not be construed as facts. The market commentary is for informational purposes only and should not be deemed as a solicitation to invest or increase investments in BJAM products or the products of BJAM affiliates. The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. There can be no guarantee that any of the described objectives can be achieved. BJAM does not undertake to advise you of any change in its opinions or the information contained in this report. Past performance is not a guarantee of future results. Information provided from third parties was obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness.

Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will be profitable. The price of any investment may rise or fall due to changes in the broad markets or changes in a company’s financial condition and may do so unpredictably. BJAM does not make any representation that any strategy will or is likely to achieve returns similar to those shown in any performance results that may be illustrated in this presentation. There is no assurance that a portfolio will achieve its investment objective.

Definitions and Indices

The S&P 500 Index is a stock market index based on the market capitalization of 500 leading companies publicly traded in the U.S. stock market, as determined by Standard & Poor’s.


BJAM is an investment advisor registered in North Carolina and Arizona. Such registration does not imply a certain level of skill or training. BJAM’s advisory fee and risks are fully detailed in Part 2 of its Form ADV, available upon request.

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD jumps to three-week highs near 1.1650 amid falling dollar, yields

EUR/USD is trading close to 1.1650, recovering ground to clinch three-week highs. The pair cheers risk-on mood-led decline in the US dollar. Treasury yields pullback, as poor US industrial data tempers hawkish Fed’s expectations. Focus on ECB and Fedspeak.


GBP/USD advances towards 1.3800 amid risk-on mood, hawkish BOE

GBP/USD is advancing towards 1.3800, reaching the highest levels in five weeks. The greenback is losing ground amid a resurgent appetite for riskier assets. BOE's Bailey hinted at a rate hike to contain inflation. UK PM Johnson vowed to fix Brexit’s N. Ireland Protocol. 


Gold eyes $1,780 amid recent USD weakness

Gold prices lock in some fresh gains above $1,770 amid a recent pullback in the greenback. The US benchmark Treasury yields trade lower at 1.57% with 0.57% losses, which weigh on the greenback.  A lower USD valuation enhances the appeal of the precious metal for the other currencies holders. 

Gold News

Litecoin on the cusp of 26% breakout

Litecoin price is on the penultimate leg of a technical formation that will catalyze a quick bull rally. LTC needs to clear one critical hurdle to kick-start a run-up to levels last seen more than a month ago. Litecoin price has been on a slow but steady uptrend since Oct 13.

Read more

Netflix Stock Price and Forecast: When are NFLX earnings?

Netflix stock falls nearly 1% on Friday ahead of earnings. NFLX releases earnings on Tuesday, October 19, after the close. Netflix stock has been boosted by the success of Squid Game.

Read more