Stocks traded lower on Tuesday - more GE fallout, a weaker OIL report from the IEA - sending oil down $1.36/barrel to $55.75 and a stronger PPI (Producer Price Index) report all contributing to the negative mood. Rates are sure to go higher in December - not that this was ever in question - I mean unless something so BIG happens in the next 4 weeks -we can all expect to be paying higher rates come Christmas......
Just one more comment on GE - because we've beat this enough.....
GE - an American Icon - has really taken a beating - down 13% in the last two days alone on top of the 37% that it had been down since January - as of yesterday - the stock is trading at October 2011 highs - and while investors are right to be frustrated with the stock and company - CEO Johnny Flannery is NOT the one that we should be frustrated with at all….in fact - he is the one that got put in the position to clean up the mess that former CEO Jeffrey Immelt created. He is the one that we are watching, this IS his moment in time.....what he does now will forever define his role as CEO of this American Icon....Wish him luck! MGEGA (Make GE Great Again!).
Notice that no one has heard ONE peep from Immelt, nothing, not a word - it kind of reminds me of former Fed Chair Alan Greenspan - I mean who has heard from him since the GFC (Great Financial Crisis) began over a decade ago? A crisis that was conceived during his tenure and born in the early days of the Bernanke regime...... Recall - ALL of the ‘crap’ that was created - that he refused to regulate - to assist the ‘housing mkt’ (think SUB-PRIME MORTGAGES) so that everyone could buy a home - was created under Greenspan's leadership - and the Billy Boy (Clinton) administration - and all was good as long as the mkts were going up and the economy didn't fail - they all patted themselves on the back - thinking that they were 'so smart'
- "Hey! Look what we did!" Yeah....that's right - LOOK AT WHAT YOU DID!
Until it wasn't - until the global economy began to falter, until the earth the shook so hard that it created a tsunami that washed across the globe - sparing almost no one......You know the story........first to go was Bear Sterns in March 2008, followed by Lehman Brothers in September 2008 (we can thank former GS CEO and Treasury Sec - Hanky Paulson along with Minneapolis Fed Pres Neel Khashkari and then NY FED Pres Timmy Geithner - but THAT IS A WHOLE OTHER STORY and btw - where is Hanky and Timmy these days?) followed by the Bernie (Madoff) debacle in December 2008... it was a time in history that they would rather forget - but WE should not let them......This is a teachable moment on so many levels.....Next up will be the Jerry Powell....the next FED chair - he is also about to be tested - how happy is Janet right now? Come on - REALLY? She is thrilled to have escaped without the world/mkts collapsing.... Stay tuned.....
Ok - so back to yesterday....it was nothing to write home about....Yes the S&P came under early pressure - falling some 11 pts to test where? 2565...the level that it has now tested 3 times since November started...but then it managed to find support and rally back to 2578. Now - look - this IS an important technical level.....if we test again - and it looks like we are going to very early today - then watch how the buyers step back as the sellers rush for the exits.....
US futs are DOWN 13 pts in pre-mkt trading - weaker energy/oil prices being called out for the negative mood around the world.......Yesterday the IEA (Int'l Energy Agency) cast doubt over the demand outlook......in fact it was defined as 'gloomy'. (Gloomy - dark, poorly lit; appearing to be depressing).
The IEA cut their demand growth forecast for 2017 and 2018.....bringing production estimates to 1.5 and 1.3 mil b/d - which is fine...but then they forecast that oil demand may not be breach 100 mil b/d - so in this case - SUPPLY EXCEEDS DEMAND (resulting in pressure on prices) - and this is in direct contrast to what OPEC has said...they expect demand to rise in 2018... Of course they do.....they want prices to rise - OPEC is talking their own book....capisce? The fact is - as we have discussed - the world is awash in oil - The US is now a player in the game so the rules are changing..........so who is kidding who....Oil is now trading below $56/barrel - down 5% in 4 days.....as investors wonder why oil spiked last week....think the unrest in the House of Saud - I mean nothing like creating drama to get everyone worked up....and drama is what the Crown Prince did....but whatever - it makes for good TV, creates a bit of volatility - and it shakes the trees - so let's see what falls out.
Global mkts are all lower overnight on the back of the oil call.....anything energy is under pressure....Energy names in Japan, China, Australia all getting clocked.....Good news about the Japanese economy being ignored - GDP in that country coming in at 1.4% - besting the 1.3% annualized estimate. China data points missing estimate are not helping. Japan - 1.57%, Hong Kong - 1.03%, China - 0.63% and ASX - 0.58%.
In Europe - mkts there are under pressure because of the oil call......as well as the weakness across Asia. Toss in weaker macro data points in Germany - Retail Sales and Industrial Production and you have a 'risk off' mentality. French CPI did rise by 0.1% in line with flash estimates. In the UK - employment figures FELL - a sign that the slowdown caused by uncertainty over BREXIT may have a larger effect on that country.....FTSE - 0.56%, CAC 40 - 0.58%, DAX - 1.2%, EUROSTOXX - 0.82%, SPAIN - 0.59% and ITALY - 1.42%.
And so - the day begins......Dow futs are down 127 pts while S&P futs remain lower by 13 pts....(0.5%)....We will get a slew of data today.....Retail Sales expected to be flat - but ex autos and gas - sales are expected to rise by 0.3%. CPI (Consumer Price Index - Inflation) is expected to come in at 0.1% - but yesterday's PPI (Producer Price Index) was much stronger than estimates - so do not be surprised by a stronger CPI today. Empire State Manf of 25.1 - this is a measure of the manufacturing sector in the NY State region.....(Empire State - aka - also known as - NY).
Boston Fed Pres - Eric Rosengren is set to speak at Northeastern Univ's Economic Policy Forum today and Chicago's Fed Pres Charlie Evans is calling on the FED (Yellen) to confirm higher rates as a result of increasing inflationary pressures - another negative for the mkts today.....Is Charlie suggesting that the FED is behind the 8 ball? Continued uncertainty over tax reform will also keep the pressure up on investors as they try to decipher the next move......
Italian Wedding Soup - A Thanksgiving Favorite
So in an Italian household - we usually start Thanksgiving with the big antipasto platter, meats, cheeses, etc....then sit down to dinner. It begins with this dish - followed then by either lasagna or ravioli's and then the turkey and all the veggies. Desert is then a range of pastries, fruits and nuts - complemented by a glass of limoncello and an espresso or two.....
For this you will need:
For the meatballs:
1 lb ground veal, fresh bread crumbs, minced garlic (2 cloves), chopped fresh parsley leaves, freshly grated Pecorino Romano, freshly grated Parmesan, milk, 1 extra-large egg, lightly beaten, s&p.
For the soup:
Olive oil, Home made chicken soup (with the onions, carrots, celery), 1/2 cup dry white wine, 1 cup of tubetini (small pasta) fresh baby spinach, washed and trimmed.
Preheat the oven to 350 degrees.
For the meatballs, place the ground veal, bread crumbs, garlic, parsley, Pecorino, Parmesan, milk, egg, s&p in a bowl and combine. With a teaspoon, drop 1 to 1 1/4-inch meatballs onto a sheet pan lined with parchment paper. (You should have about 40 meatballs. They don't have to be perfectly round.) Bake for 20 minutes, until cooked and lightly browned. Set aside.
In the meantime, in a large pot heat up the soup add the wine and bring to a boil. Add the pasta to the simmering broth and cook for 6 to 8 minutes, until the pasta is aldente.
Next - add the meatballs to the soup and simmer for 1 minute. Taste for s&p. Stir in the fresh spinach and cook for 1 minute, until the spinach is just wilted. Ladle into soup bowls and sprinkle each serving with extra grated Parmesan. A nice piece of garlic bread on the bottom of the bowl is always a favorite.
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