You Mean No More Debates?

Oil surged on an unexpected draw DOWN - the EIA reported that reserves fell by  5.2 mil barrels in the week ended October 14th - sending energy shares higher, earnings continued to 'beat the estimates' , the FED's Beige Book showed modest improvement, FED speakers assure the country and the world that the US is ready for a hike but don't worry - no one is gonna get run over, the Saudi's 'launched' a $17.5 bil bond sale with 5 yr yields of 2.58%, ten yr notes yielding 3.4% and 30 yr bonds fetching 4.62% - (these compare to the US 5 yr at 1.23%, 10 yr at 1.75% and 30 yr at 2.51%).....Tesla outfits all of its vehicles with technology that allows them to drive sans humans and in a throwback to the 80's/90's - a 34 yr old Goldman junk bond trader reaped $100 mil in profits for the firm as he 'bought billions of dollars in Junk corporate debt on the cheap' at the beginning of the year locking in massive gains as those same bonds recovered in the months that followed.....the S&P, Dow, Nasdaq and Russell all rallied and the world is good.....

Now while all of those indices did close higher - they were off their highs of the day - running into some selling pressure as the final hour of trading came to an end.....as the countdown to the 3rd and final presidential debate began......the Univ of Nevada - Las Vegas hosted the candidates in what was sure to be a night of fireworks....in the end though - it was less so - Trump did try to taunt Hillary - but she was not about to be knocked off her podium - Chris Wallace demanded answers from both of the candidates on Immigration, The Supreme Court and the direction that each would take on appointments, The Economy, and Russian influence over our election.........I guess the biggest surprise of the night was Trump's refusal to accept the final tally...vowing to keep the country in 'suspense' if he loses....

US futures are now up 3 pts as the mkt is suggesting that it expects a Clinton win in 19 days.....Trumps performance - while not off 'his rocker' - did little to change the mindset of American voters - both dead and alive!   (Wink, wink - that's another story - so let's just leave that as a topic of discussion for another day....) And the 'new' metric - the Mexican Peso -  used for predicting the US election - is trading up - suggesting that Trump did little to change the direction of the election and that the Clinton's will be moving back into the WH. 

Now while initial expectations for 3rd qtr earnings was negative - after 1 week - earnings are on track to be slightly positive at the end of the reporting season - and this makes sense -right?  Analysts/strategists got everyone ready for another down season, estimates get cut even deeper allowing for reported results to beat estimates by wider margins - suggesting that the MAGNITUDE of the 'beats' confirms what the administration and the FED have been telling us....And don't discount all of the 'improved forward guidance' that we are all of a sudden hearing from these same companies....it's called smoke and mirrors as we move closer to election day..... I mean how can the outlook change so dramatically from when analysts CUT estimates reflecting concern to - WOW! - Look at those numbers!   It all supports the FED's need to normalize and better future guidance plays right into that narrative.....as the FED now has one more argument for the need to raise rates by 25 bps.......

This morning the dollar index (DXY) is flat and oil is backing off a bit after yesterday's surge.....WTI is now trading at $51/barrel - down 58 cts...or 1.1%....and gold is holding steady right at $1270/oz which represents long term support....Mkts around the world were and are mostly higher...In Asia - Japan +1.39%, Hong Kong + 0.3%, China flat, and ASX + 0.12%....

In Europe - mkts there are higher as they and we await the latest news out of the ECB....What will Draghi say and do? Now while he is not expected to make any changes at all in policy - the devil is in the details - right?  Investors will be reading between the lines trying to figure out what will happen in March 2017 when the current program is supposed to come to an end.   The surprise will be if the mkt assumes that the ECB will extend the current program - now while I don't believe he will make predictions about March, I do believe he will continue to hold the line and say that the ECB will do whatever it takes to continue in its recovery....so what does that mean?   Only you can decide....This morning British Retail Sales did disappoint....results of 0% vs exp of +0.2% - as concerns continue to mount over the coming breakup between the UK and the EU.  FTSE +0.17%, CAC 40 +0.19%, DAX +0.13%, EUROSTOXX  +0.28%, SPAIN +0.30% and ITALY +-0.09%.

Earnings today include: Signature Bank - beat, Alaska Air - beat, Danaher Corp - beat, Dunkin Donuts - beat, Bank of NY/Mellon - beat, Pulte Home - beat, Fifth Third Bancorp - beat, Textron - MISSED.....(Come on - you need at least one to miss to make it believable.....)

Eco data Init Jobless Claims of 250k, Cont Claims of 2.053 mil, Philly Fed Survey of 5, Existing Home Sales of +0.4% (m/m). 

As I said - US futs are up 3 pts in early trading....I suspect that churn here - test yesterday's highs at about 2150 ish and then continue to churn.  I think that most of the debate and continued better earnings are already priced into the broader mkt - We will hear from NY's FED Pres Dudley  a couple of times today - his first appearance at 8:30 am - the same time as Draghi's press conference in Europe....and since Dudley is more of  a hawk and has made hawkish comments over the past day - I fully expect that more talk could put some downside pressure on the mkt....With the possibility of a Democratic win in the WH and the Senate and talk of higher rates - I don't believe there is a reason right now for the mkts to rally hard.....I'm just sayin.....
 

Take Good Care
KP

Greek Style Swordfish

 For this you need: Swordfish, Spinach,  Crumbled Feta cheese, butter, s&p, olive oil and fresh lemon juice.    

Start with fresh swordfish steaks.  Marinate in:  Olive oil, S&P, fresh lemon juice - cover with saran wrap and let sit at least 1 hour on the counter. You want it to be room temp when you put it on the grill.

In a separate pan - sauté a bag of fresh spinach in a bit of butter and Olive Oil.  Season with s&p.  After it wilts down then turn off heat and set aside.

Preheat the grill on high for 10 mins....when ready - place the swordfish steaks on the grill and sear.  Leave for 4 mins or so (depending on thickness) then flip.  At this point - cover each  swordfish steak with the sautéed spinach.  Add crumbled Feta cheese and close cover.  Turn heat to med and leave for an additional 4 / 5 mins until done.  The feta will be soft but not melted.   

Arrange the swordfish steaks on a warmed serving platter and complement with a mixed green salad.  Your favorite chilled white wine is the perfect complement -  

 
Buon Appetito.