-
The churn continues – stocks edge higher as the VIX retreats.
-
Oil now trading at $72.64/barrel – as demand is alive and well.
-
The FED is now in the blackout period – announcement due next Wednesday.
-
Negotiations continue in DC – Democrats tell us it is NOT about redistributing wealth or punishing innovation.
-
Try the Grilled Halibut.
So, concerns over a FED tightening were replaced by concerns over a slowing economic recovery were replaced by it’s all nothing to worry about…. stocks rallied nicely on Wednesday…. with the Dow gaining 238 pts, the S&P up 38 pts, the Nasdaq up 124 pts, the Russell up 25 pts and the Transports up 134 pts….
The 10 Yr. treasury bond yield rose to end the day at 1.30% up from 1.27%, the Dollar fell leaving it struggling to hold onto the trendline…at 92.63….and this morning the dollar is up by 22 cts at 92.771. The VIX lost 6.5% - once again suggesting that fear is subsiding. Gold – is falling as it becomes just a bit clearer that the FED isn’t going to move anytime soon on rates leaving it to test the June lows of $ 1750 most likely….
Oil gained 3% to end the day at $72.64/barrel – suggesting that demand is strong – (note the EIA report) all confirming the Goldman call earlier in the week that ‘oil was on the verge of spiking’…..(everything I have been saying for months)….Oil has now gained back ALL of the losses (15%) suffered between July/August as the naysayers were trying to blow it up….As of last night oil is now up 18% off the August lows and is higher again this morning.
All eyes are now keenly focused on next week’s FOMC (Federal Open Market Committee) meeting – where Jay Powell is now expected to say – nothing….other than the same narrative he has been saying….which is – we are making progress, but recent eco data is suggesting that there are some bumps ahead so ‘we’ are maintaining the status quo – BUT will be looking at all data points in the months ahead to see if we should ‘tweak’ the plan…..so do not expect any definitive announcement just yet about a November/December taper….which doesn’t mean it still can’t happen, it just means we won’t hear about it next week.
Remember – Jay has made it very clear that taper does not mean rate hikes…. the two events are mutually exclusive and that is helping him maintain stability – that is if investors believe him. And that depends on which day it is because we have seen how that can change from day to day…. One day we are concerned and the market retreats, then the next day we are not concerned and the market advances…. which is exactly why you need to eliminate the noise and stick to your plan.
This morning US futures are DOWN…. not much, but it goes to my narrative…. yesterday it was all roses and today – there is just some lingering concerns…. Dow futures are down 33 pts, the S&P off 7, the Nasdaq off 40 and the Russell is down 6…as the churn continues….
Investors trying to assess what not only Jay will do, but what elected Democratic officials are going to do with the $3.5 trillion infrastructure plan and the associated array of new taxes that they are trying to impose upon Americans and the country. Right now – there is lots of chatter and headlines in the news cycle as both sides prepare for the fight……so while it is interesting, it only serves to create daily angst as the headlines swing back and forth between the pluses and minuses of the complete plan…. with the Chair of the Ways and means committee – Representative Richard Neal (D, MA) telling us that the point of this plan and associated taxes is.
‘Not to redistribute wealth, not to punish innovation…but to expand opportunity for the American people and support our efforts to build a healthier, more prosperous future.”
In any event – the conversation continues and will clearly remain a focus for investors and markets over the coming weeks…. but in the end – it will not price stocks in the long term but can and will create some chaos in the short term.
Eco data today includes: the usual suspects – Initial Jobless Claims of 323k, Continuing Claims of 2.7 mil, Philly Fed Survey – exp of 19 and the all-important numbers today – Retail Sales…..and m/m they are expected to be down 0.7%, ex autos and gas they are expected to be flat…now expect the talking heads to detail how this report speaks to how the consumer feels….while CPI was ‘hot’ it was not HOTTER than expected this month – but with the PPI running at 8.3% (as of Friday’s report) – the expectation is that next months CPI will reflect the upward pressure….and that will serve as the catalyst for continued angst….
And we still have the FED to deal with – while many think, myself included, that he will now not lay out a definitive plan this month – he will have to at some point…. Again, I wish he would but I am not on the committee so I can’t force the call….
Tuesday and Wednesday’s test of the 50 dma did reveal that buyers are defending that position for now….We have tested that trendline 6 times in the past 5 months – and have always been rescued by the FED….and it appears that is the case again….let’s see what Jay says next week….We are now in the blackout period – so do not expect to hear from any of the FED committee members in the next week – although it would not surprise me if we heard from the non-members of the committee – as they take the temperature…..
European markets are up today – in defiance of the weakness in Asia – (weak retail sales) and the weaker US futures – which are waiting for today’s Retail Sales report….No eco data to speak of across the Eurozone, but there is a fair amount of political back and forth going on….Boris Johnson reshuffles his cabinet in the UK and German Finance Minister Olaf Scholz is facing questions about the failings at the federal anti-money laundering agency…this is important why? Because he is the favorite to succeed Chancellor Angi Merkel in the end of the month elections…. At 6:30 am – markets across the region area all up between 0.5% - 1.5%.
Bitcoin continues to trade right here at $47,800 while Ethereum is now above $3500. Threats by SEC Chair Gensler to regulate the asset not doing much to cause a pullback. And the latest news that Cathie Wood is predicting Bitcoin to trade at $500k in 5 yrs. is helping to create all kinds of interest…. All while Ray Dalio (Bridgewater Associates) is convinced that the SEC will ‘kill it’ because they have ways of doing that. (Now to be transparent – Dalio is an owner of the asset).
The S&P ended the day at 4480 – as it continues to trade in a very tight range….4430/4575. The 50 dma at 4430 is the level to watch….and this will be important if we hear something from the FED that we do NOT expect to hear…. (Think a definitive plan to taper).
Grilled Halibut in a Lemon/Olive Oil Marinade
Ok – so this was the grilled fish dish from Sunday night…So easy – and so good.
For this you need: 4 - 6 oz Halibut steaks – skin on, 2 fresh lemons – squeezed for the juice, 2 tblsp of the olive oil, 2 minced garlic cloves, lots of fresh basil – rough chopped, 2 tsp drained capers.
Heat the grill – and then clean with your grill brush.
Brush your halibut with olive oil – season with s&p. Set aside.
In bowl – mix the lemon juice, the olive oil, the garlic, basil, and capers. – set aside.
When ready – place the halibut on the grill – skin side down – cook for 8 mins, flip, and cook the flesh side down for another 7 mins.
Remove from grill and place on a serving platter – Now pour the marinade over the hot fish – dress it up with slices of lemon. (See picture) Cover with foil and let sit for 4 mins….
Now – serve buffet style along with the honey glazed roasted carrots and roasted fingerling potatoes. Always have a nice salad to assist. Dress in olive oil, fresh lemon, s&p, and some oregano. Simple – yet delicious.
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.
UNLESS OTHERWISE NOTED, INDEX RETURNS REFLECT THE REINVESTMENT OF INCOME DIVIDENDS AND CAPITAL GAINS, IF ANY, BUT DO NOT REFLECT FEES, BROKERAGE COMMISSIONS OR OTHER EXPENSES OF INVESTING. INVESTORS CAN NOT MAKE DIRECT INVESTMENTS INTO ANY INDEX.
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.
Recommended Content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.