WWDD? Tony, Jared, Rudy & Kim? Really?

The Dow ended down 25 pts on the day while the S&P ended up 6 pts, Nasdaq +65 pts and the Russell add 8 pts….…. The VIX was lower by 6.3%, the 10 yr yield fell to 2.937% while the 30 yr yield fell to 3.055%.  GDP estimates are now all topping 4% for the 2^nd qtr and the Atlanta Fed GDPNow model is still screaming 4.8%.  Retail Sales blew the estimates out of the water – coming in at +0.8% vs the expected +0.4% - suggesting that the consumer has NEVER been happier….
 
And if that is NOT enough – Anthony (Tony) Scaramucci (remember him) is now leading the fight to get Michael Milken’s – the ‘80s Junk Bond King - conviction for securities fraud PARDONED……Maybe he should include Bernie’s conviction as well…I mean “What are we talking about here?”  and to make it really interesting – Jared Kushner, Stevey Mnuchin and Rudy Giuliani are all supporting Tony in this effort…. the only ones missing are Kim Khardashian and her sidekick – Kanye West along with their kids – North and South…. …. I mean you can’t even make this up – who would ever really believe it??
 
30 yr Mortgage rates though rose to 4.68% while the 15 yr mortgage rate rose to 4.07% on avg.  Median housing prices in America rose to $300k and those homes are selling like hot cakes (apparently)  - but the median home price in NYC is $1.4 mil and the median home price in Greenwich, CT is $1.5 mil, but the median home price of currently listed homes is $2.195 mil…..and in Westchester County, NY – median prices are nearing $1 mil while currently listed median prices are closer to $1.6 mil ….with both state taxes and real estate taxes ‘out of control’ in NY and in Westchester – housing prices have taken a beating and continue to do so….. now that tax reform has hit…. But hey – the economy is buzzing right along….
 
And the mkt is either making new highs (Nasdaq & Russell) or teasing with the earlier 2018 all-time highs – all while 1.  the FED is normalizing and raising rates while the ECB announced yesterday that they will begin normalizing beginning January 2019……Since their bond buying (QE) program is due to end in December…..and 2. Trump is about to hit China with $50 bil of tariffs while China is due to hit us right back to which Donny has said – ‘OK – then get ready for $100 mil more in additional tariffs” to which XiXI  (pronounced like GiGI)  said – “Bring it on….we will hit you right back”…and for XiXi – that means hitting farmers (big Trump supporters) right between the eyeballs…..and so it goes – the Trade War that Stevey Mnuchin told us not to worry about is now upon us…..so Stevey?  What’s next? 
 
Now US futures are naturally lower this morning – currently down 15 pts….as the reality of this “NOT TRADE WAR” is given life…. the headlines say it all….
 
“Donald Trump Approves Tariffs on About $50 bil of Chinese Goods”
 
“Trump Said to Approve $50 bil of Tariffs – China Plans Payback”
(And remember – Payback is a B*tch)
 
“Stocks Slide on Trade War Worries…”
 
Now each story runs with the angst-ridden headline – suggesting that it’s already done…but if you read in between the lines – ‘it still isn’t clear WHEN the tariffs will go into effect’ – which essentially means that they are still looking for a way out of this…. Yes – both sides are pounding their chests and scratching their …… (fill in the blank).  Now XiXi has said that China and the US faced a choice between cooperation or confrontation – and if he has anything to say about it – XiXi chooses the former….so the ball is right back in Donny’s court…. So WWDD (What will Donny Do) ……?
 
Now European stocks are under a bit of pressure as morning turns to afternoon on that continent…. investors digesting the ECB news and the approaching end of ‘easy money’ – even though rate hikes there are not to begin until the 2^nd half of 2019…….EU core Inflation came in at +1.9% while wage growth scored 1.8% up from 1.6% last qtr.  FTSE -0.73%, CAC 40 - +0.14%, DAX – 0.21%, EUROSTOXX – 0.18%, SPAIN – 1.23% and ITALY -1.32%. 
 
Eco data today includes Empire State Manf – of 18, Ind Prod of +0.2%, Cap Util of 78.1%.... now this is very interesting…. we are getting closer to 80% - and that seems to be a tipping point…. because as it approaches 80% + it suggests that the economy is about to run ‘hot’…and you know what that means………BINGO!  I-N-F-L-A-T-I-O-N!  and then those monthly press conferences that Uncle Jay told us about suddenly take on new meaning…. Just sayin’……
 
 
Again yesterday we attempted to run up to and kiss 2800 (3^rd time)  but failed….and all this says is that buyers are being a bit more cautious as they await word on the China ‘not trade war’…..and as long as the rhetoric remains hot – expect the buyers to pull back – as the sellers gear up……I suspect that as we move into the weekend – and this issue remains unresolved – the mkt should weaken today…NOT collapse but just weaken….if the European mkts are any guide at all…we should probably trade 0.5% - 1% lower on this news….and that brings us right back to the 2745 ish level on the S&P…..if that doesn’t hold then the trendline is 2710 on the downside….on the Upside – if it should turn – 2800 remains resistance…..Now if Trump declares a ‘do over’ as he is willing to continue to ‘talk’ then that might cause excitement among the algo’s which then could see us move right thru 2800….but I am NOT expecting that to happen today. 
 
Today is also Quadruple Witching – that event that happens 4 times a year when 4 sets of options expire simultaneously…. Watch as volumes explode both on the opening and the Closing….and expect the media heads to focus on how the China trade war has begun and the volumes in the stock mkt have exploded – DUDE – one has NOTHING to do with the other….do NOT connect those dots at all.  The volume will explode due to the expiration of the options – Period. 
 
 
Oil is down 0.19 cts at $66.69. There is NOTHING new in this conversation – other than the stronger $ thus the ‘pressure’ (if you can call 19 cts pressure) in oil.    We remain in the $64.68/$67.62 range. 
 
Gold is Down $5 at $1,302/oz…. on the back of the $ and the BoJ statement – which said NOTHING new. They are maintaining the status quo……  We remain in the $1299/$1310 range. 
 
Take good care.  Happy Father’s Day…….
 

Swordfish Steaks in Lemon, Basil & Mint

Let's try the Swordfish today - as the mkt appears to be slicing her way lower....
 
This is an easy and delicious summer dish.... swordfish steaks are great on the grill and when you present it on a bed of arugula and tomatoes - it is just beautiful.  
 
For this you need:  Swordfish, olive oil, fresh lemon juice, chopped basil, chopped mint, chopped garlic (like 2 cloves), s&p.....
 
Mix together all of the ingredients (except the swordfish) and taste to make sure you got it right.... now pour half of the mixture over the steaks and let marinate for 30 mins....
 
Heat the grill - Now place the steaks on the grill and cook for about 3 mins and then flip (clearly if the steaks are thick - then grill a bit longer).
 
While the steaks are cooking - prepare the plates with a bed of arugula and sliced - beefsteak tomatoes.  Season with s&p, and a squirt of fresh lemon juice.  (You can add a splash of balsamic if you like).  Now place the grilled swordfish steak on the arugula and serve with your favorite chilled white wine.

Buon Appetito.