Kenny Polcari's Tumblr

Managing Partner, Kace Capital Advisors. CNBC Market Analyst. Chief Market Strategist, Slatestone Wealth. Board Member, Headstrong Project.

[kennypolcari]

FED suggests that Stocks are 'Undervalued'! Futures Surge and it's Thursday... Try the Butterscotch Clusters

Stimulus, stimulus and more stimulus… investors were held in check yesterday as legislators in DC all promised to ‘not go anywhere until this is done’… Not sure they had much of a choice – and in fact – I would say it’s their own fault… They could have had this all done months ago – but each side chose to play the partisan game vs. the right thing to do… Whatever. In any event the markets churned – neither surging nor falling as it awaits a final outcome… hour by hour – we waited as little bits of information got leaked to see how the markets and investors would react. The Dow gave up 45 pts and the Russell gave up 7 pts while the S&P gained 7 pts and the Nasdaq rallied by 63 pts. Even the vaccine failed to ignite a rally – which speaks volumes – as the market has already priced that in…

In terms of stock action – it was a boring day. The part 1 deal which was being bandied about as a $740 billion deal is suddenly now a $900 billion deal – with more money for ‘direct’ payments to Americans and increased unemployment benefits. The headlines suggesting that the ‘elements expected in the package should support consumer spending and that leads to a better GDP for the 1st qtr of 2021… No one is even talking about part 2 right now.

Now here is where it goes off the rails a bit for me. Eco data yesterday focused on Retail Sales – and while the expectation was for a reading of -0.3% - it came in at -1.1% - a big miss, right? The media raised alarms… “What a big miss!” Congress has to do something quick! OMG! What does that say about the health of the consumer? It’s laughable… (almost)… But think about this for one minute… do you remember the chatter surrounding Black Friday, Small Store Saturday and Cyber Monday (or Cyber week)? Do you remember the headlines? Is it me?  

Black Friday 2020 (November 27th) sales surged by 22% to a record $9 billion (most of that online – think covid) – which makes it the second largest online spending day in the history of the US… and then there was Saturday – where it continued and then it was Cyber Monday! Do you remember the hype around Cyber Monday? (November 30th) Just to remind you – Americans set a record for the BIGGEST shopping day EVER in US History – ringing the cash register $10.8 billion times… Headlines screamed – ‘record breaking’, ‘phenomenal’, ‘unbelievable’… and the list goes on… and the shopping went on… the media had a party as they reported how incredible it was, how Americans were not going to let a virus ruin the holidays… that they were happy to sit at home and go online and ‘shop till you drop’ – it was almost offensive – right? Deals, Deals and more Deals – Retailers have been preparing for this since the summer and who is kidding who – the shopping began following Halloween and I didn’t even point out those numbers – it would be a November to remember followed by a December to remember season… So, I’m just sayin’ – I am not so sure I believe it… it makes no sense… there is a glaring disconnect between what the data shows us and what the data shows us! Oh – and btw the way – the Retails Sales data yesterday was for November and the last time I checked all of those shopping days happened in November… Now they spun the story as a restaurant, dept stores and auto dealerships story… as they all reported ‘sharp declines’… dept stores reported sharp declines? I just told you Americans spent a record number of dollars… but none of it in the physical store – so I guess since store traffic was down (think covid) they can get away with saying that dept stores saw sharp declines – Its semantics… but it helps to spin the story. In any event – it’s ridiculous.  

And then – we heard from Fed Chair Jay Powell at 2 pm… as expected – there was no change in the plan, rates to remain low through 2022 – and he reminded us that the FED is prepared to let inflation run a little ‘hot’ before they would even consider changing their plan – He also said that ‘stock prices are not necessarily highly priced given how low interest rates are’!  Essentially telling Santa Claus to ‘come back, come back…!

This morning – the headlines in the WSJ continue to entertain us…

“US Shoppers Pull Back at Start of Holiday Season” (isn’t this fake news?)

“Ten States Sue Google, Alleging Deal with Facebook to Rig Online Ad Market” – now that’s an interesting story – and one that should not surprise anyone… at all… Maybe Lizzy Warren is right – break them up and throw the book at ‘em!

“Massachusetts Regulators File Complaint Against Robinhood” – suggesting that the online trading platform took advantage of and exposed inexperienced investors – and I use the word investors cautiously – to ‘unnecessary trading risks’. ‘They aggressively marketed to inexperienced traders and failed to implement controls to protect them’.  

I guess the surprise here is that regulators (or anyone else) ARE surprised… and when you get guys like Davey Portnoy (CEO at Barstool Sports) swinging around millions of dollars, saying that it’s like taking ‘candy from a baby’ proving Mailkiel’s decades old claim that a ‘blindfolded monkey’ throwing darts at the financial pages could select a portfolio that would do just as well as one selected by experts  – it only accentuates the stupidity especially when the media features him  on a daily basis using scrabble pieces to select stocks and discuss his latest ‘investment’ while he lights up Twitter with his ‘buy’ and ‘sell’ signals.  

“Amazon Faces Unionization Push in Alabama, a Test in Labor Organizing Bid” – And this is sure to gain some traction as it is the nation’s second largest employer ‘testing the potential for additional labor organizing at the retailing giant’.

US futures are up… after Jay Powell promised everyone that he isn’t going anywhere and the FED will continue to feed the beast… and as the focus remains squarely on the stimulus plan. Dow futures +127 pts, the S&P up 20 pts (and if that holds – the S&P will make a new high at 9:30), the Nasdaq is up 62 pts and the Russell is ahead by 20 pts! News that a couple of people who got the vaccine had allergic reactions – is not dampening the story at all… Dr. Fauci – suggesting that if you usually get a reaction to any vaccine then you should either not get it or make sure you’re in a hospital ‘just in case’. President Elect Joey along with former Presidents, Obama, and Clinton all promising to line up and get the vaccination in public – so that everyone can see that it is safe – I guess my only question would be – Is that really the vaccine in that little vile or is it just a saline solution? I mean – it’s a fair question – they are and were the Presidents – Can you imagine if something ‘went wrong’? Oh boy!

Eco data today includes:  Initial Jobless Claims of 815k, Cont. Claims of 5.7 mil, Housing Starts of +0.3%, Building Permits of +1%.  

European markets are mostly up… on the back of the FED’s commitment to stay the course and on further hopes of that stimulus deal is just around the corner… like I said yesterday – the 11th hour is right around the corner. The BoE (Bank of England) is set to publish their latest monetary decision (no change expected – rates to remain in place). Other macro data includes ‘new car registrations for the EU’ – oh boy… that’s what we’re looking at now to give us clues on the health of the economy? New car registrations?  Let’s think about this for one minute… what are new car registrations really going to reveal? Are you going to make a decision to buy or sell stocks on new car registrations?  In any event – at 6:45 am - the FTSE +0.03%, CAC 40 + 0.44%, DAX +0.77%, EUROSTOXX +0.15%, SPAIN +0.02% and ITALY +0.43%

Gold is up $23…at $1,882 – taking it up and through trendline resistance at $1,880… as talk of a deal gets closer…. If it continues to advance then the next level that should provide any resistance at all is $1920.  

Bitcoin exploding higher… this morning trading up $1500 piercing up and thru 22k about to test 23k.  

The S&P closed at 3701 and this morning appears as if it is going to blast right up and through this year’s high of 3712… And why not – Fed Chair Jay Powell re-iterated his commitment to easy money – there is nowhere else to go! As I have been saying we are in uncharted territory – trendlines reveal a wide channel of 3450/4020… a tighter trendline might suggest that 3790 is possible before year end… a level I am not supporting… I remain a bit cautious in the short term.  I would not be chasing stocks here right now. Talk to your advisor, design your plan and stick to it… Remember – it is year end, investors will make year-end decisions based on a range of personal factors and stocks will come under year-end tax planning pressures – which does not define what the markets will do in the new year.

Take good care.  

Kp

Butterscotch Peanut Clusters

Here is a personal favorite of mine - they are Butterscotch/Peanut clusters (all in 10 mins) and are a Christmas favorite… My grandmother used to make these every year and every time I eat them - it brings me back to an earlier time... Today it is something that I do with my girls – and it always brings them back to their childhood…

For this you need - Nestle Butterscotch morsels, salted peanuts, and Chinese noodles... (you know the crunchy ones).

Begin by setting up a double boiler - when ready add in the butterscotch morsels... stir until melted... now add in the noodles and the peanuts... stir to coat really well. When ready - remove from the heat and with a tablespoon - take scoops of the mix and plop them onto wax paper... They will harden into clusters in about 10 mins...

They make a great addition to the other holiday deserts at the table.  

Enjoy.  

[kennypolcari]

NYC Mayor Threatens to Shut It Down, Temperatures Rise, Stocks Fall – Try Grandma’s Almond Butter Cookies

Stocks opened higher yesterday even though the stimulus deal did not happen over the weekend – investors were holding out hope that maybe, just maybe there was deal somewhere in there… in addition, we all watched the video of the first doses of the vaccine left the Pfizer headquarters on Saturday making their way to both FDX and UPS distribution centers to be delivered to a variety of hospital centers across the country by Monday morning… and then we watched as the very first person, an ICU nurse in NY, took the vaccine… others around the country followed suit and before you knew it stocks were teasing the most recent highs, Carl Quintanilla calling it a ‘historic day in America’ and then the bell rang and boom – stocks took off… The S&P once again kissing 3700 (as expected), the Dow rising 280 pts, the Nasdaq adding 164 pts and the Russell advancing by 33 pts all by 10:20 am.  

Then talk of Germany shutting down, while other European countries struggled with the latest surge began to dominate the chatter… and while we know that the US is under attack again the mood changed when NYC’s Mayor – Billy ‘D’ announced that NYC was about to go into total ‘lockdown’ again – not just the restaurants and bars now, the whole place was about to go dark – and all this did was re-emphasize the reality of the latest surge… hitting the world and the country. Immediately the markets started to turn as analysts began once again talking about the impact on the global economy. Stocks did a 180 and by the end of the day the Dow and S&P ended in the RED – down 184 pts and 16 pts respectively while the Nasdaq and the Russell managed to eke out gains… Up 63 pts and 2 pts respectively.  

The dark winter that Dr. Fauci and others have been warning about – is apparently now knocking on our door – talk of the Thanksgiving surge is now talk of the ‘holiday’ surge… with Hannukah, Christmas, Kwanza, and New Year’s next on the list. Travel and leisure stocks taking it on the chin, while the work from home names moved up. 9 of the 11 S&P sectors falling and as you would expect – when the temperature gets turned up – energy got whacked – the XLE (Energy ETF) falling 3.5% as talk of a shutdown caused OPEC to cut demand forecasts for the next 6 months….as the ‘Covid Winter’ becomes a reality. But again- I would say – this is not new news… scientists have been warning of the dark winter ahead since Halloween, yet the markets driven by the algo’s seemed to discount that (think the coming vaccine) and move higher – in fact making new highs just last week.

The VIX (fear index) rose by 6% yesterday as the level of angst rose as well…and you know – when fear goes up, stocks usually go down.  And that is what happened yesterday, as talk of a total NYC shutdown once again raised the specter of a national shutdown across major cities. So you ask – how come the Nasdaq went up – simple – it’s about tech – XLK + 0.36% and biotech – XBI +2.6%. As the country and the world goes through the second wave, it only emphasizes the need for technology and how that same technology allows many of us to work remotely and get treated for the virus and other illnesses.  

Then there was talk of the stimulus deal once again taking center stage, were they closer than the media imagined? Maybe yes, or maybe no… And while the launch of the vaccine was considered bullish news here in the states, many of the frontline workers and public workers (think police and fireman) are making it clear that they have ‘no intention’ of taking the vaccine – and they are not required to – the choice is theirs and this only added to the angst. Calling into question – if it’s so safe, how come they are choosing not to get it? Just because the media is telling us that it is safe (as per scientists and Dr’s) doesn’t necessarily mean that the vaccine is without possible long-term issues. The last time I checked – we do not live in a police state – Americans are free to make choices and this is just another choice – now say what you want about the efficacy of the vaccine, but in reality – it is a choice – so people are going to have to make that choice and come to terms with what they think is appropriate. I guess the next hurdle will be those ‘vaccination cards they are handing out – Will businesses, offices, restaurants, bars, shopping malls, hospitals, airlines, cruise ships, etc. REQUIRE you to show a vaccination card in order to be allowed in? Oh boy… it is a slippery slope for sure and one that is also likely to be challenged in the courts – lawyers stand to make a fortune! Is there a lawyer ETF? If not – expect one soon.    

This morning – we are seeing a bit of a rebound… with both the Dow and the S&P taking back what they lost yesterday and then some. The Nasdaq and Russell continue to add to yesterday’s gains… There are now two new stimulus proposals on the table – one is at $748 billion plan for both add’l fed unemployment claims and a new PPP (Paycheck Protection Program). The second one is a $160 billion plan that deals with those contentious liability issues as well as help for state and local gov’ts. In the end – it does feel like there is an 11th hour deal… and I suppose the 11th hour will come on Christmas – since unemployment benefits expire on the 26th… I’m just hoping that we don’t have to wait until then!  

Look – they tell us that it will get worse before it gets better – and we know that, I guess though, no one really knows how to define ‘worse’ at the moment… because ‘worse’ can take on so many iterations, which is exactly why you should not make any emotional or rash decisions – if we know one thing, it is that this too shall pass – so hang in there.  

European markets are all rebounding but remain mixed… after yesterday’s move lower. BREXIT concerns still at the top of the list with covid a close second… negotiations between the EU and the UK appear to be moving along… European Commission President Ursula von der Leyen telling us that there was ‘movement’ on some of the more contentious issues which is good, but not definitive. And while this also appears to be difficult – I think there is an 11th hour deal in there as well. I do not think that UK PM BoJo wants to go into the new year with no trade agreement with the EU. At 6:30 – the FTSE -0.09%, CAC 40 + 0.4%, DAX +0.75%, EUROSTOXX +0.55%, SPAIN -0.42% and ITALY +0.16%

Eco data today includes: Empire Manufacturing Survey – exp of 6.2, Import prices +0.3%, Export prices +0.2%, Industrial Production of +0.3%, Cap Utilization of 73%.          

Gold which was down yesterday is up today… taking it all back. At 6:40 am gold is up $15 at $1847/oz… remaining well within the $1828/$1880 range… (trendline support and trendline resistance). Bitcoin is up $80 at $19,280.  

Oil is flat after its crazy day yesterday… but is still holding up at $47/barrel. Yesterday – OPEC expressed concern about what the latest virus surge will do to demand and oil and energy names got whacked… but again – I say – this is not new news… WTI remains in the $45-$50 trading range.  Remember – you can make a $55 argument for oil in the weeks ahead. And while the next couple of months are expected to be dark – the sun appears to be shining in March… so sit tight.  

The S&P closed at 3647 down 16 pts… after teasing 3700 at 10:30 am. I said I thought 3700 would be the high for the year and that the markets will churn into year end and I continue to believe that.  Look for more churn and look for volumes to decline as we get closer to Christmas. European markets will essentially ‘close down’ beginning next week – as will the US markets… and that is the time when we could see dramatic swings in the market because there will be less participants. Longer term asset managers will place buy orders below the market in case we get a sell off and they will place sell orders above the market in the event that we get a late month surge.  Remember – many still expect a January re-pricing – the depth of which will be dependent on the GA Senate race.  

Again – today we might get some more news about the stimulus and the continued vaccine process. I still believe that the market is consolidating… and continue to believe that we are at the highs. Either way – it is what it is… Stay the course and talk to your advisor.  

Take good care.  

Kp

Grandma’s Almond Butter Balls (A Christmas tradition)

Today’s recipe comes to you from a dedicated MT reader and a twitter follower – ‘Michelle D’ The recipe is one that her grandmother (Terry D) used to make and one that is featured in their bakery located the Federal Hill neighborhood in Providence, RI – Scialo Brothers Bakery.

You need:  1 c of butter, softened, 1/2 c of confectionary sugar, ½ tsp of salt, 1 tsp of almond extract, ¼ tsp of vanilla extract, 2 c of all-purpose flour.  1 ½ c of finely chopped almonds.

Mix the butter and sugar until creamy. Add in the remaining ingredients and mix well.  

Refrigerate for 1 – 2 hrs.  

Preheat oven to 350 degrees.  Hand roll into 1” balls (think ping pong balls – that’s my idea).  

Place on an ungreased cookie sheet, bake for 10-12 mins.  

Sprinkle or roll with confectionary sugar.

Present on a nice cookie dish and serve on your desert table… these are soooo good…

[kennypolcari]

The Fights have Begun – The Vaccine launches, and The Electoral College Votes – Try the Fettuccini

Good morning… It was the week of IPO abbondanzas!  (An abbondanza is an Italian word that means abundance – but it’s a celebration of that abundance, it is joyful and demonstrative!) and what an abbondanza it was… You remember right? Doordash C3.ai and AirBnB… were the stars of the week… leaving some still in awe of their market performance… in fact – in another show of ‘not knowing what they are doing – some ‘traders or bozo’s’ (must have been the Robin Hood types) – were ‘furiously buying’ call options in ABB on Thursday – ABB is a big SWISS industrial company not AirBnB – (ABNB) the disruptive US travel/leisure/lodging/tech IPO that came to market on Thursday… Which makes me laugh – because apparently all of those ‘sophisticated traders’ can’t read either… because when you type in ABB on your Bloomberg machine you’ll notice a couple of things… 1. It trades at $26.75 (a far cry from the $140 ABNB price).  2. You’ll see that ABB is an ADR (American Depository Receipt) meaning that it is a foreign company – based in Zurich, Switzerland and last time I checked – Zurich is not the same as San Francisco. 3. The CEO is a guy named Bjoern Rosengren and not Brian Chesky… and if you even looked at CNBC – all you saw was Brian Chesky’s face all over the screen. And this is all so reminiscent of the same thing that these ‘trader bozo’s’ did when Zoom Communications (ZM) came to market… they thought they had a ‘secret’ and went out and bought calls on Zoom Technologies (ZNTO) hoping to cash in on the Zoom Communications trade… Which just leads me to ask – Did they think these two stocks were fungible? (mutually interchangeable).

Barron’s run with headline –

“IPO FRENZY – Not long ago, the markets for initial public offerings was dormant.  Now it’s booming, fueled by easy money, a surging stock market, and fear of missing out.”

And again, I will ask – Does it feel a bit 1999-ish… (just a bit?) Now understand that there are some differences – the stocks today actually have business plans vs. just a ‘dot com’ in their name, the Fed was ‘tightening policy’ vs. today they are ‘loosening policy’ with interest rates at zero and the addition of $120 billion of stimulus on a monthly basis. But then - What does that say about investment bankers demand and valuation models? How could they all have missed it? Are they not aware of the accommodation by the FED?  Whatever, it was what it was and if you were lucky enough to get in on the craze – you were very happy. But – the action in those 3 names did not mimic the rest of the market.  Stocks were under a bit of pressure even as these 3 names were going bonkers… By the end of the week the Dow had lost 0.6%, the S&P was off by 1%, the Nasdaq gave back 0/7% and the Russell bucked the trend and added 1.2%.  

In the end – it was the lack of a defined stimulus program, it was more of the political drama, it was the launch of the PFE vaccine in the UK – and it was rising concerns over surging cases of covid-19 AROUND the world – and the lockdowns to come… German Chancellor Angela Merkel announcing that Germany is going into ‘hard lockdown’ through year end as infections swell. France remains in lockdown, Greece is in lockdown until at least January 7th and citizens there must text a gov’t number to get ‘permission’ to leave the house and give the reason why they need to leave. Italy is now awash in Red, Orange and Yellow zones while Spain remains in a ‘state of emergency’. In the UK – London is burning even as the vaccine rolls out… So, I guess the Americans are not the only ones suffering a second and third wave of infections…

Here at home – cases continue to rise in sections of the country. NY’s Cuomo and CA’s Newsome announcing the halt to life as we know it – closing nearly every small business in those states – while leaving the big box stores, Costco, WMT, TGT, Grocery and Drug Stores etc… open suggesting that the virus only attacks people in small family-owned businesses. And now with the December holiday season in full swing – the temperature is rising across the country as well.  

Over the weekend – we did not get any new news on any additional stimulus out of DC… as the fight rages on… but again this morning US futures are UP on hopes of something. At 5:15 am – futures are surging… the Dow up 225 pts, the S&P’s up 22, the Nasdaq ahead by 45 and the Russell is advancing by 23 pts. Now part of this is that ‘backing and filling’ I have been talking about… last week saw the S&P pierce 3700 and trade up to 3712 in what was the final surge in the Santa Claus rally – it ended the week at 3663… down 1.3% off that high. This morning’s surge will attempt to take on 3700 again… once again backing and filling the chart.

Look – the eco data is softening, a range of states are becoming more restrictive, businesses are getting shut down… Initial jobless claims are rising and now with states beginning to shut down again, we can only expect that those numbers will surge again. DC has to do something and while everyone expects an 11th deal – I thought the 11th hour was gonna be Sunday evening – ahead of the market open on Monday… and don’t discount that just yet… as the rumors of a deal continue to swirl – it will have so much more impact if the headlines hit the tape BEFORE the market opens…

In addition – the US is now ready to begin the vaccination process today… with UPS and FDX responsible for shipping the vaccines around the country. FDX from the center West while UPS takes from the center and goes East. In a recent statement FDX revealed that “We have worked closely with our healthcare customers on a highly orchestrated and precise distribution plan, but are not releasing details”.  

December 13th – will now be known as a new kind of ‘D-Day’ – in the military – D-Day is the day the mission begins… and it began yesterday – many will mark today as the official beginning (and they would be wrong) as the first round of healthcare professionals get vaccinated. The launch was yesterday… Capisce? There are many key elements that will make this a success or failure – logistics, temperature, side effects and vaccine reluctance are just some of them… But, it’s time to go… Will you get yours?    

Next – The courts have had enough of this Election drama and shut down any efforts by the Trump Administration to continue to challenge the election and today the electoral college delegates will cast their votes for Joey… sending Donny on his way (or maybe not) We are about to find out…

Friday brings that massive entry into the S&P for TSLA… expect to hear more about this this week… as there is $5.4 trillion in index funds that track the S&P and there is another $6.7 trillion in actively managed funds that use the S&P as their benchmark… so when this gets added to the S&P – all of these funds will have to buy this stock while selling others in order to remain in balance. It is sure to be a bit chaotic but this is not new news and many of these funds have already begun the process… and many will continue post Friday…

Eco data this week includes a bevy of macro data: Today – nothing. Tuesday brings us the Empire State Manufacturing Survey – exp of +6.9, Import and Export Prices of +0.3% +0.2% respectively. Ind Production of +0.3%, Cap Utilization of 73% (relatively benign) a number approaching 78 – 80 would be more of a concern. Retail sales are due on Wednesday – exp of -0.3%, Ex autos and gas of +0.2%. Markit Manufacturing PMI of 55.8 (bullish), Markit Services PMI of 56 (bullish) Wednesday brings us the FOMC rate decision – NO change expected. Later in the week – Building permits of +0.9%, Philly Fed survey of 20, Housing starts of 1.5 mil.  

European markets are up as well… BREXIT talks – are advancing, but there is still not an 11th hour deal… and UK PM BoJo is warning the UK and the EU of a ‘no deal’ exit on December 31st. And in Germany – non- essential businesses and schools will close beginning on Wednesday through year end the virus rages on.  

Gold is down by $18 at $1824/0z… And Bitcoin is rallying by $1000 – trading at $19,131.  

Oil is up 50 cts at $47.05/barrel. Hope rising as the US kicks off their virus inoculation program. WTI remains in the $45-$50 trading range. Remember – you can make a $55 argument for oil in the weeks ahead. And while the next couple of months are expected to be dark – the sun appears to be shining in March… so sit tight.  

The S&P closed at 3663 down 4 pts on Friday as the churn continues… I said I thought 3700 would be the high for the year and that the markets will churn into year end and I continue to believe that. With the exception of those 3 IPO’s – many investors are rebalancing and re-pricing for what they suspect could be a bit of volatility ahead. The Georgia senate race is the next election drama point – and what happens there will set the tone for the next two years. A Democratic sweep will cause the left wing of the party to put the pressure on Joey, a GOP win will take the pressure off of Joey – I suspect Joey wants to see a GOP win… this way he doesn’t have to deal with the left wing’s hysteria and he has demonstrated that he can reach across the aisle and get it done.  

Again – today we might get some more news about the stimulus – I still believe that the market is consolidating… and continue to believe that we are at the highs. Either way – it is what it is… Stay the course and talk to your advisor.  

Take good care.  

Kp

Fettuccini w/Garlic, Mushroom, and Prosciutto Cream Sauce

My baby brother made this on Friday evening… it was so good – I am featuring it here

For this you need: 1 lb. Fettuccini, garlic, sliced mushrooms, prosciutto, heavy cream, freshly shaved parmigiana.

Bring a pot of salted water to a boil to get it ready.

Next – chop the prosciutto (not dice) and then sauté in a large frying pan – do not burn, just sauté… after 5 mins… remove and set aside. Now add in the sliced garlic and sliced mushrooms and sauté for 15 mins. Now add back the prosciutto and let it blend together. Turn heat to low – and add in the heavy cream and incorporate nicely.

Add the fettuccini to the water and boil for 8 mins or until aldente. Now – using your spaghetti serving spoon - Add the fettuccini to the sauté pan with the mushroom cream sauce. Mix well and serve in warmed bowls. Top with freshly shaved Parmegiana cheese - have more cheese on your table for your guests.  

[kennypolcari]

MGS & GS Get it Wrong Again! FDA Approves Vaccine and Oil Surges - Try the Mussels

Stocks continue to struggle -with the exception of another newcomer to the public markets…

ABNB (AirBnB) followed DASH and AI and exploded higher – opening up by 118% at 1:30 pm on the Nasdaq… making CEO Brian Chesky (and a bunch of others) – the newest billionaire and millionaires! It’s all very exciting – but again begs the question – is it a bit ‘out of control’ at all? I mean I get it, it’s a disruptor, it’s fun, it’s exciting to sleep in someone’s else’s bed and to live in their house, but to have a market value of $90 billion which is greater than Hilton ($29 billion), Marriott ($42 billion) and Expedia ($18 billion) combined makes little sense to me and I haven’t found anyone that can clearly and succinctly explain it (valuation not the concept). I mean – think about it… the highly paid, ivy educated investment bankers at Morgan Stanley and Goldman Sachs, did all of their due diligence, they analyzed the data, put it through models, adjusted assumptions, re-analyzed the data and then told Chesky that the company was worth $68/share… (in their view ‘fair value’) leaving of course a little bit on the table to provide some juice to make it all exciting… Price it at $68 and leave maybe 10% - 20% on the table to reward those that put their money up and to provide some excitement for the markets. But to leave 118% on the table? Nah – something doesn’t add up… either all of those highly paid investment bankers and all of their high-speed computers that do all of the data mining were completely misinformed OR all of those asset managers and portfolio managers are smarter than the average bear… I mean – does anyone see a disconnect at all? Clearly there was much more demand than supply – so BINGO – they did a very good job of ‘creating the pre-IPO frenzy’ (the way they did with DASH and AI) – but the job of all those investment bankers is to be able to ‘price that frenzy in’ and to leave 118% on the table suggests to me that someone was asleep at the wheel – I can’t imagine any of the sellers of that stock wanted to leave 118% on the table – but that’s another conversation… Either way – it is what it is – Chesky and others are very happy because they still own a ‘bunch of stock’ – yet they can’t help feeling that maybe they left just a little ‘too much’ on the table… but with enough champagne and caviar it’s all good. All very exciting, but in my opinion completely mis-priced but what do I know? In any event – Welcome to the new world – who’s next?  

So, while ABNB was surging the rest of the market was trying to price in the latest virus news, the latest vaccine news, the latest stimulus news, the latest Biden Cabinet news and the latest Trump lawsuit news… and what did it decide? Investors are mixed – eco data showed an increase in jobless claims (not good), and increase in Continuing claims (not good), an increase in CPI (Consumer Price Index) not good (think pending inflation) …which caused the indices to go up and then down… leaving the Dow lower by 70 pts or 0.23%, the S&P’s off by 5 pts or 0.13%, the Nasdaq up 67 pts or 0.54% and the Russell up 20 pts or 1.08%.  

Markets waited all day for the FDA (Food and Drug Admin) to publish their decision on the PFE/BioNTech emergency use order… and that decision was made public after the close – the advisory panel did recommend approval by a vote of 17 – 4 (not unexpected)  and this clears the way for the vaccine to be available as early as today…With the virus essentially ‘out of control’ it is sure to be a welcomed relief in patients 16 yrs or older.  Of the dissenters – the worries were that there wasn’t enough data in the 16 – 20 age group and that others wanted to see at least 2 more months of data to be able to determine if the vaccine does in fact reduce or stop the transmission of the virus. Now – just because they approved it, doesn’t mean that everyone is supporting the use of it… recent data out of the UK is raising some concerns over side effect and allergic reactions… PFE has already come out to say that if you are someone that has ‘allergic’ reactions to vaccine – then don’t take it… but that is a very small population… So let’s see who lines up for it and who doesn’t…

And while all this was happening – oil traders were having their own party… taking Brent above $50/barrel and taking WTI (West Texas Intermediate) above $47/barrel. This now has oil trading up 35% in the last month and up 77% from the panic April lows. (Now to be clear – oil is still down 16% on the year) – but demand for oil is alive and well and I have been screaming about this for months now in my daily note while the media and the analysts were cool to it… Confusing because in the same breath they are all talking about the coming economic boom in 2021 – yet they kept telling us that demand is weak… (HELLO???) … Look – nearly everyone is on the same page and expects an economic resurgence in 2021 – a resurgence that is going to demand energy… Capisce? So with renewed demand and a more disciplined OPEC + production schedule – there is only one way for oil to go (now)… As a result of all this excitement – the energy etf – XLE surged by 3.07%!  Yahoo! And the individual names that we all know – XOM +2.8%, CVX +3.2%, OXY +0%, SU +3.8% all enjoyed the company of buyers.

Now look, as demand increases – then look for more supply to hit the markets and that will keep oil in check… no one wants oil to surge to $70/barrel as the global economy attempts to recover… and btw – the world is awash in oil so supply is NOT an issue at all… I still think we are in the $40/$50 range but could explain $55 as a target only because there is a trendline that goes back to March 2019 that would prove to be resistance – in any event – there is plenty of supply to meet demand, period, the end.

Now this morning – US futures are lower again… in fact they are getting kicked in the gut…at 6:30 am - Dow futures off by 240 pts, the S&P’s are lower by 35 pts, the Nasdaq is off by 117 pts ant the Russell is lower by 21 pts and what’s the story today?? Guess? The LACK of a stimulus plan… the LACK of any consensus and according to the headlines – there is confusion… Mitchy McConnell telling us that Senate Republicans will most likely ‘not support’ the latest $900 bill package while Nancy Pelosi tells the media that the ‘bi-partisan negotiations were leading to great progress’! OK – which is its? You can’t have it both ways – so someone is misinformed – that seems to be the theme of late… Investment bankers appear to be misinformed and elected leaders continue to display their complete lack of empathy, compassion and understanding as they talk out of both ends. The FDA approval – while good news – was also expected, so it is not (at the moment) providing any support to the markets… the focus is squarely on DC and while they like to produce all of this drama (to justify their hard work) I still expect an 11th hour deal which will allow both sides to save face.  

Eco data today includes PPI (Producer Price Index) exp of +0.1%, Ex food and energy of +0.2%, and the U of Michigan 1 inflation forecast and their 5 – 10 yr forecast (which in my opinion is a worthless data point). I mean what are you gonna do with that? Is it really going to change your near-term decision-making process? And btw – I would love to know how they even come up with a forecast for inflation 5 – 10 yrs out. What are the assumptions?  

European stocks are also under pressure and this is after the ECB (European Central Bank) EXPANDED their stimulus program by more than 1/3rd and introduced a whole new set of ultracheap loans for banks in recognition of the damage that the pandemic has caused. In addition – as the clock ticks there is an increasing possibility that the UK is about to get divorced from the EU without a ‘divorce/trade’ agreement. UK Pm Boris Johnson (BoJo) telling his countrymen that there is a ‘strong possibility’ of no deal… and that will ignite a whole new set of taxes, tariffs and fishing rights – never mind free travel in the region… and with a Sunday deadline – there is still room for an 11th hour deal – but the tone today is that, that is unlikely… but that’s the game….everyone knows that they need a deal, so I fully expect they will get one (maybe not perfect) by Sunday evening. At 6:45 am - FTSE -1.14%, CAC 40 -1.46%, DAX -2%, EUROSTOXX -1.66%, SPAIN -2.4% and ITALY -1.45%.  

Gold comes under a bit of pressure – down $3 at $1834/oz as stimulus talks stall… which is also a joke – because there is an 11th hour deal that will hit the tape… as both sides will then pat themselves on the back and take responsibility for ‘getting it done’ – gold remain in the $1825/$1885 range.  

And Bitcoin is down again today… falling $684 to $17,661… Just fyi – trendline support is at $16,515…

The S&P closed at 3668… as the churn continues… I said I thought 3700 would be the high for the year and that the markets will churn into year-end… With the exception of 2 or 3 of the latest IPO’s causing a bit of excitement – many investors are rebalancing and re-pricing for what they suspect could be a bit of volatility ahead. While the FAANG names may be coming under some pressure – do not despair – they represent only a tiny fraction of the technology space… there is plenty of opportunities… which doesn’t mean you blow out of these positions… it just means look elsewhere in the sector. Semi’s, Cybersecurity, IoT, 5G opportunities, AI and remember – no matter what you’re in (for the most part) technology is playing a significant role… so you’re always exposed to tech.  

Again – today we might get some more news about the stimulus – but my guess is that at this point – it will be a weekend event… to have ‘maximum’ impact as we get closer to Christmas. I still believe that the market is consolidating… and continue to believe that we are at the highs.  Either way – it is what it is… Which reminds me of the famous Warren Buffet mantra – “Be fearful when others are greedy and greedy when others are fearful” …

The holiday season is now under way. Happy Hannukah to those that celebrate this holiday as it started last night and goes until the 18th, then it will Merry Christmas and Happy Kwanza and then Happy New Year where we can all kiss 2020 goodbye and look for the bright lights of 2021.  

Take good care.  

Kp

Mussels Posillipo

This is the final Feast of the Seven Fishes Recipe... in fact, this is the 8th recipe – because I gave you both linguine and lobster sauce and linguine and clams… If you wish – you can substitute this dish for any of the others… or you can just make it all!

This recipe comes to us from the suburbs of Naples - Posillipo is a well-to-do suburb of Naples; it was built during the 19th century by the very affluent – high on a bluff with a view of that famous Bay of Naples. Posillipo is a recipe that you can use for both clams or mussels – I am suggesting that you use the mussels for the Christmas Eve dinner.

You need: Mussels... 3 doz… thoroughly washed of any sand. White wine, Clam juice, garlic, olive oil, s&p, 1 28 oz can of imported Italian Plum tomatoes (Not in Puree), Fresh Basil

In a pot – heat the olive oil and sauté the garlic until lightly browned – do not burn.

Add 1 1/2 c of dry white wine – nothing fruity – stir and let come to a boil – after about 2 mins... rough crush the tomatoes and add to pot with the juice.

(When you rough crush – you literally crush them in your hand – over a bowl to catch the juice. – you can also use the blender – but do it quick – do not puree) Add enough of the tomatoes to give it some substance and color – you do not need to add the whole can if you are not serving it over linguine.

Add the small bottle of clam juice and fresh basil leaves. Season with s&p. Turn heat down to simmer and cook for about 15 mins or so. Now add the mussels to the pot and cover tightly. Cook until the shells open – should be maybe 8 to 10 mins more... Discard any mussel that refuses to open.

Present this dish in a large bowl with the mussels bathing in the Posillipo sauce. This dish demands toasted garlic bread to dip in the sauce.

[kennypolcari]

DASH & AI Soar - Which Begs the Question - Are we at the top? Try the Baked/Broiled Salmon - Recipe No. 6

Doordash and C3.ai come to the NYSE… in another IPO bonanza! Both companies being introduced as the newest members of the NYSE family… and neither disappointed… Both exploded higher while the Nasdaq got crushed and the broader market came under pressure… which is such an interesting contrast… while all of the excitement surrounding these names stole the show – investors were once again considering what to do as the markets made new highs on Tuesday and the virus continues to spin out of control and elected officials in DC continue the histrionics… While stocks initially traded up – by the end of the day – there was red all across the board – except for those two newest members of the family whose action was like the North Star… shining brightly in the dark… At 4 pm – the Dow had lost 105 pts or 0.35%, the S&P gave back 30 pts or 0.8%, the Nasdaq got crushed (which is the real story) and lost 244 pts or 1.9% while the Russell gave back 16 pts or 0.82%.

Remember – we are at new highs all on negative news… There is nothing new here… the vaccine is old & negative news, the surging virus is old and negative news, the stimulus talks are old and negative news, so again – be careful… Yes – we are at the year’s high, all on old and negative news… so I’m just sayin’ – Can the market go higher – of course, will it go higher? Of course, but can it also go lower? You bet… and I’m just sayin – don’t get pulled into the frenzy – this is exactly the time you need to use your head and stick to the plan… (The frenzy in this case are the out of control pricing action witnessed yesterday… action which I believe will re-price in the weeks ahead… when we enter the new year and the broader market gets re-priced).

Now just a quick recap of DASH and AI – in was what a show of support – investors couldn’t apparently get enough of either… after Goldman and UBS suggested that DASH was fairly priced at $102/sh – already up from an earlier estimate of $80/sh and Morgan Stanley and JPMorgan told investors that AI was fairly valued at $42/sh up from the original $38/sh  – Investors/traders and algo’s told all of those investment bankers that they were wrong… that they mispriced both of these IPO’s… and as the opening bell rang on the NYSE yesterday – the market makers at the post attempted to assess all of the demand and supply… orders being delivered to the system electronically from brokerage firms around the country as well as floor brokers representing both broker/dealers as well as the direct customer (think hedge funds, mutual funds, pensions plans, etc.) coming together to determine a fair price… and it didn’t just happen… oh no, it is a process for sure – one that is always fascinating to watch – (and was much better when it was all human based – sans the computers – but that’s another story…).  

You’d think – the computers would make it easy, right? You’d think that the computers would just take all of the interest and go BANG – here’s the price… but you would be wrong… while the computers attempt to do that – what you realize very quickly is that the investment bankers – in this case Goldman Sachs and Morgan Stanley– try very hard to control the whole situation… demanding that nothing happen until they give the ok… Now on a certain level, that is fair – but at some point, it gets old… What they try to do in this case is control ALL of or most of the action in the stock for opening day… They hold the opening and canvas the institutional base – attempting to gather all of the IPO interest to control price and action. Warning those same clients that if they go away from them, they risk getting their orders not represented and/or unfilled – which is a complete and total farse… (absolutely FAKE news… not a shred of validity to it - ZERO…)  But that’s another story… And while every other stock on the NYSE opened at 9:30 – AI opened at 11:54 am at $100/sh or +138% while DASH opened at 12:42 pm at $182/sh or a 78% premium to what those investment bankers suggested was a fair price. Amazing… and while the excitement is evident in the action – it also speaks volumes about investor psyche…..and sentiment….In this case – excitement which I believe was waaaaayyyyyy overdone… now in the end I could be wrong, but my gut tells me that there is a bit of ‘froth’ in what happened yesterday… and today – we will see what happens when another IPO takes the stage over at Nasdaq – Air BnB (ABNB) is set to launch… and this morning we find out that both Goldman and Morgan Stanley are the leads in this listing as well…

This morning we find out that they priced this issue at $68/sh up from the original $56/$60 share pricing giving this company a $47 billion valuation… (DASH now has a $60 bil valuation and AI has an $8 bil valuation) – So what’s the guess? If this opens up anything like what we saw yesterday – expect to see opening prints anywhere between $120 and $160 share… even as their own IPO materials acknowledge some risks…

“In light of the evolving nature of Covid -19 and the uncertainty it has produced around the world, we do not believe it is possible to predict Covid-19’s cumulative and ultimate impact on our future business, results of operations and financial condition”

– but still, they try to mute this concern by also saying that:

“We believe that as the world recovers from this pandemic, AirBnB will be a vital source of economic empowerment for millions of people.”  

And while both statements are true – let’s see which ones investors will pay attention to… my gut tells me that this IPO too will be a star performer today… just because of the excitement that has been building around this name for months and because of the excitement in the IPO space this year as money looks for new opportunity… but again – Buyer beware… Brian Chesky founder and CEO of ABNB to appear on CNBC this morning… surely he is one happy 39 yr old… and it is sure to be a very happy holiday season for him and til ‘death do us part’… Bravo!

US futures are churning after what was a bit of consolidation yesterday… Dow futures are +55, the S&P’s are +5 pts and the Russell is up 6 pts while the Nasdaq is off by 7 pts… Again – it is the Nasdaq story that is not getting enough attention here… And while yesterday’s Nasdaq move was nothing more than a pimple on your (fill in the blank) – it is interesting to note that while those two IPO’s caused all kinds of excitement in the TECH space – investors are taking the opportunity to take some money off the table in some of this year’s tech ‘hi flyers’… and that MAKES perfect sense… the Nasdaq was up 36% ytd as of yesterday morning… this on top of the 34% in 2019 – which as you might remember was off the lows created during the December temper tantrum in 2018 when we saw the Nasdaq plunge 23% between Mid- Sept and end of year leaving it down 4% in 2018.  

European markets are up small and doing the churn as well… as investors around the world consider the potential of a post-BREXIT agreement and what the agreement will look like. Both sides – the EU and the UK vowing to make a formal decision by Sunday… the stumbling blocks?  Fishing rights and competition rules… and if no agreement gets done – taxes and fees are expected to soar – further hampering a smooth transition. In addition – the ECB (European Central Bank) is due to publish their latest thoughts on monetary policy decisions and macroeconomic projections… the expectation is for them to expand their massive stimulus program as the continent gets hammered with a second/third wave of the pandemic. This even as the launch of the virus has begun… because that too, will not just ‘fix everything’ – it too is a process. At 6:45 am - FTSE +0.54%, CAC 40 +0.28%, DAX +0.08%, EUROSTOXX +0.19%, SPAIN +0.07% and ITALY +0.26%.  

Oil is up 66 cts at $46.17 – the logic today…?  The benefits that the vaccine will bring and the demand that is expected to come once the world is in recovery mode… (have you heard this before?) Like I said yesterday and have been saying for months now – Don’t overthink it – the recovery is happening (although it doesn’t feel like it right now) and with that will be the re-opening trade that includes energy and oil. We are well within the $40/$50 range as it builds a base right here in the mid 40’s.  

Gold comes under a bit of pressure as stimulus talks stall… which is also a joke – because legislators have abdicated their responsibilities on behalf of those suffering – but there is an 11th hour deal that will hit the tape… as both sides will then pat themselves on the back and take responsibility for ‘getting it done’ – I say – stop paying the legislators until they fix it – put the pressure on them to actually do something… it is shameful… In any event – gold remain in the $1825/$1885 range.  

Bitcoin is down again today… off by another $300 trading at $18,212/coin… now off 11% since two weeks ago when the media paraded the Winkelvie twins across the screen to tell you that Bitcoin was going to $500,000/coin (at some point in the future…) or as Novogrataz tells us – it will be $150k by this time next year… Let the games begin…

The S&P closed at 3672 retreating after breaking that psychological 3700 big round number… In any event – it feels like its churning… I said I thought 3700 would be the high for the year and now the markets will churn into year-end… With the exception of 2 or 3 of the latest IPO’s causing a bit of excitement – many investors are rebalancing and re-pricing for what they suspect could be a bit of volatility ahead. Again, today we might get some more news about the stimulus – but my guess is that they will wait at least one more day (if not two) to make ‘maximum’ impact… it will be interesting to see how this plays out… Will the Dems back off on liability shields and will the GOP embrace more stimulus for individuals? I still believe that the market is consolidating… and continue to believe that we are at the highs. Either way – it is what it is…

Remember we are now in unchartered territory… we are smack in the middle of a very broad trendline channel… 3400/3900… and we are only weeks away from year end – While the algo’s could attempt to push us a bit higher – I believe that the smart money will most likely unload some of the highflyers as they expect a re-pricing in the early part of the new year.  As the long-term investor – stay focused and stay the course, keep balanced.

Take good care.  

Kp

Recipe No. 6 – Baked/Broiled Salmon

This one is the easiest of them all. You need only a couple of things – Salmon, Old Bay Seasoning, fresh lemon juice and olive oil.

Get you salmon – skin on – rinse under cold water… pat dry. Place nicely in a baking dish – season with Old Bay and a squirt of fresh lemon juice and olive oil and bake on 375 for 15 mins… Now Turn from bake to broil and broil the tops for a couple of more mins… Careful not to burn. Remove and serve. Simple! No fuss, no mess. And when you are making 7 different dishes and need to put them all out at once – this is one of the simpler ones to get done – and it’s always good.  

Buon Appetito.

[kennypolcari]

It’s almost the 11th hour; Joey Sending Petey to Beijing? Dash Makes its Debut – Try the Feta Shrimp

In yesterday’s note, I said:

“Remember – congress is due to go on vacation on Friday – and with no stimulus deal done yet, it just raises the temperature in the room… Now, I fully expect that there WILL BE a deal by end of the week - there will be an 11thhour deal where both sides will try to claim they won…”

Guess what??? The 11th hour is getting closer! Enter stage left – Treasury Secretary Stevie Mnuchin to the rescue! A Bloomberg article describes it like this:

“Treasury Secretary Steve Mnuchin made a SURPRISE RE-ENTRY into talks on a 2020 pandemic-relief package with a $916 billion proposal that opened a potential new path to a year-end deal despite objections from Democrats over elements of the plan.”

Now the re-entry is because he stepped back recently and left it to McConnell, Pelosi, Schumer and McCarthy to hammer out a deal – which they have been unable to do… so – DA, DAAAAHHH… in his usual ‘dramatic’ fashion – Stevey joins the group again – promising to come to the rescue – bringing that 11th hour deal within reach. After discussing it with (Lame Duck) President Trump – who supports it, Stevey offers up a $916 billion plan (again more than the $908 billion that the Dems proposed) – the deal includes  $600 stimulus payments to individuals, eliminating the $300 supplemental unemployment aid, (Dem oppose), it offers $160 billion in state aid for those states that have mismanaged their finances (you know who they are- something that the Dems are demanding) while also providing ‘robust’ protections (Liability shields) for employers from Covid-19 related lawsuits (something that the DEMS oppose)  – something that is sure to come which must be why the Democrats oppose it so vehemently… I mean I guess I’m wondering – Why would protecting employers from these lawsuits be such a dealbreaker for Democrats? Why are Nancy and Chucky so intent on letting frivolous – sure to be – ‘class action’ lawsuits to thrive? It’s simple – they want someone to be responsible for people getting sick… they want employers and insurance companies to foot the bill and pay up! The argument that employers should be responsible for protecting employees is at the root of it (and I do agree up to a point) … employers that force employees to return to work (without ATTEMPTING to protect them) run the risk of those employees getting sick – thus the Democrats want to hold those employers responsible… And this is a slippery slope for sure… because what’s next? Employees that fall and break a leg on their way to work will get the right to sue their employer because they ‘had to go to work’?  I mean – when does it stop? So, as long as the GOP wants to protect employers – the Dems won’t go for it… (I’d like to know which lobbying firm in DC is representing the lawyers!) and so this is unlikely to be resolved as long as the Democrats continue to craft a plan that not only allows but encourages these lawsuits. And so it goes… but don’t kid yourself – the 11th hour is coming… It’s all about the DRAMA… someone will blink…

In any event – when the news of the latest $916 bil deal hit the tape – the algo’s went into overdrive and did what? You guessed it- BUY, BUY, BUY… sending all the indexes higher – leaving the Dow up 104 pts or 0.35% just shy of a new record, the S&P up 10 pts or 0.28% to a new high, the Nasdaq up 62 pts or 0.5% to a new high and the Russell up 26 pts or 1.4% - not yet a new high (but surely on its way!). Tech, healthcare, energy, basic materials, and industrials all surged, Utes, (Utilities), financials, consumer discretionary and communications got hit. Value names outperforming growth names and it was a frenzy again… as the algo’s tripped over each other thinking that that there will never be a down day on Wall St!  

And the news that the UK has launched the largest inoculation program in the history of the world only added to the excitement as the media focused on the ‘brave’ Brits that stepped up to be the first in line to get vaccinated… Now, it is a bit comical – because those brave Brits are more than 90 yrs old… which leaves you to applaud them, but begs the questions “What do they have to really lose?” Capisce? (Wink, wink). Either way – Maggie Keenan and Willy Shakespeare will go down in British history as the first to step up to the plate in the name of humanity and for that I wish them well!

Doordash – (DASH) the latest ‘tech’ IPO to come to market priced itself at $102/sh raising some $3.37 billion for 33 million shares of stock. Now I say it’s a ‘tech’ play because why not? I mean – I order food from a restaurant and pay for it – via my app on my phone – which then connects to a Doordasher – via an app on his/her phone – who then picks it up from the restaurant and then delivers it to my work or my home as instructed… all of the directions to the restaurant and then to me provided by google maps (via an app on your phone) while SIRI – an app on your phone – speaks to them giving them turn by turn instructions (sounds like UBER) to make sure that they have taken the fastest route allowing your food to be delivered still hot and delicious… did you notice all the TECH involved in this process? So DASH is not a delivery company – it’s a Logistics powered by TECH company, like UPS & FDX, that are also Logistics powered by TECH companies. (and by the way in fact every sector is a sector powered by TECH – financials, banks, energy, healthcare, retail, utilities, industrials, and everything else) And yesterday everything that is TECH surged… not just the FAANG names… (Hint – TECH isn’t going away – so make sure it’s a part of your portfolio!)

And the pricing of this IPO – to be traded on the NYSE today is testament to the investing frenzy that exists… and tomorrow it’s all about AirBnB! (ABNB) – And that too is another TECH company… Don’t kid yourself… it’s TECH! It’s Travel and Leisure powered by TECH – think about how you find, book and pay for your AirBnB. (Hint:  App on your phone) and their total addressable market – is over a trillion dollars… and I expect that their IPO pricing will be adjusted up before the end of the day as well.

US futures are mixed? WHAT?  Mixed? Impossible! Dow futures are +90, the S&P’s are +7 pts and the Russell is up 14 pts while the Nasdaq is off by 7 pts… (that is surely a mistake). Again – there is nothing new here… the vaccine is old news, the surging virus is old news, the stimulus talks are old news, so again – be careful… Yes – we are at the year’s high, all on old news… so I’m just sayin’ – Can the market go higher – of course, will it go higher? Of course, but can it also go lower? You bet… and I’m just sayin’ – don’t get pulled into the frenzy – this is exactly the time you need to use your head and stick to the plan… it is also the time to talk to your advisor to rebalance your portfolio in order to keep it growing without losing sight of the inherent risk. Which is why you have an advisor – because it is their job to protect your back(side). Capisce?  

And in a headline that just crossed the tape – Joey is considering sending Petey (Buttigieg) to Beijing to become Ambassador to China – saying that it will set him up for running for President… or is it just a way to get him out of Kamala’s hair – so she can continue building her brand to step into that role.    

In Europe – markets there are all up as well… the focus is squarely on the BREXIT talks between the UK and the EU. UK Pm BoJo is on his way to Brussels to dine with EU Commission President Ursula von der Leyen in a last-ditch effort to seal this deal. The focus on the vaccine rollout will be the subplot… but it will be there. At 6:15 am - FTSE +0.44%, CAC 40 +0.18%, DAX +1%, EUROSTOXX +0.49%, SPAIN +0.17% and ITALY +0.06%.  

Oil is up 17 cts at $45.70 – the profit taking that earlier in the week sent oil a bit lower, now being met by buyers again as the vaccine story once again fuels the demand story… I mean just think about all the gas those DASHERS use to deliver food… never mind UBER, UAL. DAL. AAL, and all the other planes, trains, ships and automobiles. Don’t overthink it – the recovery is happening (although it doesn’t feel like it right now) and with that will be the re-opening trade that includes energy and oil. We are well within the $40/$50 range as it builds a base right here in the mid 40’s.  

Gold is holding steady at $1862/oz while Bitcoin falls another $480 bucks to $18,295/coin.

The S&P closed at 3702 – breaking that psychological 3700 big round number and is sure to excite the algo’s… leaving the S&P this year to trade in a range of 2191 on March 23 to 3702 on December 8th.  A stunning 1500-point range… and WHO out there ever expected that to happen last January? In any event – it feels like its churning… I said I thought 3700 would be the high for the year and now the markets will churn into year-end… Renewed lockdown restrictions, are now being challenged all across the country – the possibility of a deal and normal re-allocation and re-balancing is what is driving the markets. Today we might get some more news about the stimulus… it will be interesting to see how this plays out in the next 48 hrs… Will the Dems back off on liability shields and will the GOP embrace more stimulus for individuals? I still believe that the market is consolidating… and continue to believe that we are at the highs. Either way – it is what it is…

Remember we are now in unchartered territory… we are smack in the middle of a very broad trendline channel… 3400/3900… and we are only weeks away from year end – estimates for the S&P next year range from a 5% to a 20% increase… Me? Tell me what’s gonna happen next year and I’ll be more comfortable giving you a target… in any event – it’s about being in the market – like the lotto says – You have to be in it to win it! While the algo’s could attempt to push us a bit higher – I believe that the smart money will most likely unload some of the highflyers as they expect a re-pricing in the early part of the new year.  As the long-term investor – stay focused and stay the course, keep balanced.

Take good care.  

Kp

No. 5 – Feta Shrimp

Feta Shrimp - This one is easy and can be served a number of ways. Either in a large bowl with toasted garlic bread or over a pasta - maybe like an Orecchiette or over white rice… For this you will need: 2 lbs of large cleaned and deveined shrimp, sliced garlic (a lot), thin sliced plum tomatoes, feta cheese, butter, s&p, olive oil & Madeira wine. * you can prepare all of this ahead of time and place in bowls to have ready for you when you are ready to cook.   The thing about this dish is – you have to make it and serve it right away…

Begin by heating up ½ stick of butter and some olive oil on med high heat. Add a handful of sliced garlic and sauté for 4 mins or so…do not burn.  Next add in enough shrimp so that you cover the bottom of the pan – do not pile them on top of each other… When they turn pink – flip them over. Now add enough Madeira wine to “bathe” the shrimp – (do not drown or cover them in wine) – Turn heat to hi… season with s&p, place sliced plum tomatoes all over and then top with crumbled feta cheese.  Cover and allow the steam to soften the tomatoes and soften the cheese. No more than 3 mins. Remove and place in a large serving bowl.  Repeat process until you have cooked all of the shrimp. When serving – make sure that you have enough garlic bread for your guests. *if you are putting over pasta - then boil the pasta - strain and mix adding extra feta cheese to the hot pasta to help make it creamy and delicious. Buon Appetito.

[kennypolcari]

Stimulus Goes Nowhere – Try the Stuffed Calamari

Stocks ended the day lower on Monday… as investors chose to ignore any of the good news out of DC – i.e. a stimulus plan (which proved once again to be ‘fake news’) and instead focused on the surging cases and increasing lockdowns…..Energy taking it on the chin falling 2.3%, as concerns over the lockdown raised the level of anxiety about demand and then the Farmer’s Almanac is predicting that there is warm weather coming to the Eastern Seaboard – causing demand for natural gas to fall as there may not be a need to spend as much money trying to heat the house this year – and if you are not spending the money, then that means you are not ‘demanding’ the gas and you know what that means… there’s a supply overload which depresses prices. The XLE – Energy ETF – which has risen a stunning 46% since November 1st, broken through all 3 trendlines saw investors take some cash off the table. Investors also sold the Industrials (XLI), Financials (XLF), Consumer Discretionary and Staples (XLY) & (XLP), Healthcare (XLV) and Retail (XRT) to re-invest in Tech (XLK), Work From Home (WFH), Utes (XLU), Communications (XLC), Biotechs (XBI), Semis (SMH), Homebuilders (XHB) and Treasuries (TLT).  By the end of the day – The Dow lost 148 pts, the S&P gave back 7 pts, the Nasdaq rose 55 pts and the Russell gave up 16 pts.  

It was all about the virus, comments and analysis about the latest move by California Governor Gavin Newsome as he shut down the state, and then you have NY’s Governor Cuomo threatening to shut down the city in 4 days if infection rates don’t settle down. Look – in April, NYC converted the 18,000 sq ft Jacob Javits Center into a military style hospital (Think M*A*S*H) for what was expected to be an onslaught of virus and infection cases, by May they shut it down after treating 1000 patients after it appeared that the worst was over… well apparently that isn’t the case – so let’s go – re-open the Javits Center – or send in the Red Cross military style hospital ship that also came to the rescue. I mean Andy – stop creating hysteria and lead. And New Mexico is also on the verge of shutting down as the cases in that state are beginning to overwhelm the system – Governor Michelle Lujan Grisham is on the brink of ‘rationing health care’ forcing Drs. to pick and choose – who lives and who dies! …So – do you notice anything in common with all of this… not making a judgment – just curious if anyone can explain.  

Stimulus talks – while they were supposedly happening – went nowhere. So once again investors showed their displeasure by taking money off the table – after plowing money into stocks after ‘they’ assured us that both sides would come together and strike a deal. What we found out is that Senate Majority Leader Mitchy McConnell is standing in the way citing the Democrats Federal limits on Covid 19 related lawsuits against businesses – calling it too limited forcing the talks to stall leaving millions of Americans potentially without any protection on December 26th. In the end – the Dems want massive money to bail out Democratic run states, while the GOP wants employers to be protected from what is expected to be a bevy of lawsuits over ‘poor protection’ against the spread of the virus.  And you know how the legal industry is lining up… they are licking their chops over what is expected to be a load of class action suits on behalf of employees. It’s shameful really.

Overnight – the UK launched what they are calling “V” Day… (Vaccination day) and remember these two names – Maggie Keenan and William Shakespeare (not kidding) … both in their 90’s, both are considered ‘at risk’ and both were the first (male/female) to take the vaccine. Many in the UK are excited – while there is a core group of Brits that have no intention of taking the vaccine (much like here in the US) …leaving that up for debate about how effective it will be if it is not widely accepted.  

And on the geo-political side it’s all about the ongoing BREXIT discussions… UK PM BoJo is on his way to Brussels to meet with EU Commission President Ursula von der Leyen after the lead negotiators failed to make any progress yesterday. At 6:45 European market are all lower… as traders and investors ‘trim their risk’ – something that no one should be surprised at.  FTSE -0.39%, CAC 40 -0.65%, DAX -0.38%, EUROSTOXX -0.56%, SPAIN  -0.57% and ITALY -0.66%.  

US futures are lower again this morning as the Risk Off trimming continues… again – it’s not panicky at all, it’s just the methodical reallocation of risk as we move into month end. Remember – in my opinion – Santa Claus has already made his rounds – the Dow has rallied 12%, the S&P is up 14%, The Nasdaq has gained 15% and the Russell is up a whopping 25% all since November 1st! And with the uncertainty surrounding the stimulus (at this point if we get it – it will be a scaled down version so it won’t be much of driver – Now we might get more once Joey takes over but that’s a February story…), the availability of the vaccine and the exponential rate of infections are sure to keep a lid on stocks. And news that PFE is expected to only ship half of what we expected is being denied… PFE fell 2% yesterday on this news… and then fell another 1% after hours – management telling us that the WSJ article that cited raw material shortages was out of date and overdone, they went onto say that their guidance (Nov 9th) has always been 50 mil doses this year and 1.3 bil doses in 2021. (The story implied that PFE was shipping 100 mil doses).  

As of 7 pm – the Dow futures are -162 pts, the S&P’s are off by 21 pts, the Nasdaq is down 52 pts the Russell is off by 12 pts.  

Remember – congress is due to go on vacation on Friday – and with no stimulus deal done yet, it just raises the temperature in the room… Now, I fully expect that there WILL BE a deal by end of the week - there will be an 11thhour deal where both sides will try to claim they won… Away from that there are no other macro data points today that will drive the action… later in the week will get CPI, Real Avg Hourly Earnings, PPI, and Empire Manufacturing in addition to the usual weekly suspects.  And as we move further into the month – expect that to be less so as the world begins to prepare for the holidays. Hannukah starts on Thursday night and goes through Friday the 18th and then Christmas on the 24th & 25th followed by Kwanza from the 26th thru the 1st which then overlaps with what is sure to be a muted New Year’s Eve celebration around the world – or will it? We’ll see. Scientists and Drs reminding us that if you thought Thanksgiving was an issue – just wait… as January/March is expected to be a long ‘dark’ period (after the holidays) and the vaccine while now available will do little to stop the darkness – just because there isn’t enough of it to inoculate everyone and it’s a process – so while it is here, it will take time to get it done.  

Oil is under a bit of pressure as the gloom grows… but again, I think it is just some profit taking after the surge and ahead of year end. Nothing to write home about. I do expect the latest restrictive measures and lockdowns to keep a lid on prices in the near term… but I expect that this will be short lived and continue to believe that we remain in the $41.50 (trendline support) and $50 range.  

Gold holding steady at $1870/oz while Bit Coin falls $320 to $18,754/coin.

The S&P closed at 3691. Renewed lockdown restrictions, lack of a deal and normal re-allocation and re-balancing is what is driving the markets. Unless we get some blockbuster announcement out of DC – I don’t see any reason for the market to rally much from here, in fact I suspect it will continue to consolidate. While the spring/summer promises to be exciting – the next couple of months could prove to be volatile causing prices to swing – offering new opportunities to put money to work. Remember we are now in unchartered territory… we are smack in the middle of a very broad trendline channel… 3400/3900… and we are only weeks away from year end… My sense is that we have seen the years high… but remember – 3700 is just another big round number that tends to get everyone excited… the algo’s could attempt to push us up and through, but the smart money will most likely unload some of the high flyers as they expect a re-pricing in the early part of the new year.  As the long-term investor – stay focused and stay the course, keep balanced.

Take good care.  

Kp

Stuffed Calamari

First you have to make the Marinara.....

Sauté garlic - 5 / 6 crushed cloves with 2 large sliced Spanish onions until soft.  8 / 10 mins.

Add 3 - 28 oz cans of kitchen ready CRUSHED tomatoes - Not PUREE... just CRUSHED.

If unavailable - then buy the cans of plum tomatoes and crush them yourself in the food processor.

Season with S&P and fresh basil.  Keep heat on Med high until it starts to boil then cover and reduce heat to simmer...stirring about every 8 / 10 mins.

Next - Stuffing the Calamari!

Take the breadcrumbs (that you used for the filet of sole) - mix with olive oil and white wine (2:1)... just enough to make them moist but not real WET. Capisce?

You need to buy the Calamari bodies for stuffing - these are the large Calamari - not the small ones... If you can have them cleaned then do so...if not - you will need to clean the Calamari...this is a delicate task and takes a bit of time...but in the end....you will wonder how you have done without.  Carefully - rinse the body - turning inside out to remove the membrane then return to its original position.  Once cleaned... proceed to stuff the Calamari with the home-made breadcrumbs.  You will need to carefully use a teaspoon to get the breadcrumbs into the calamari and then use your finger to push the breadcrumbs down into the body - careful not to overstuff otherwise they will explode in the sauce. Once stuffed - close the end with a toothpick and set aside.  Once you have completed this total task - move over to the marinara sauce made in step 1. Carefully plop the Calamari into the sauce stirring gently so as not to cause the Calamari to tear or explode. Keep heat on simmer and cover.  Make sure to stir every 3 /5 mins for about 20 mins... Calamari are done. You can eat now OR you can turn off the heat, cool down, refrigerate until tomorrow. This sauce is ALWAYS BETTER ON T + 1  (day 2).  Trust me! When reheating - take the pot out of the fridge and let it warm up to room temp before putting back on the heat… When you do - use the simmer function and reheat slowly... stirring attentively.

If done right – these are soooooo good…

Buon Appetito

[kennypolcari]

The Hypocrisy is Numbing – Try the Bay Scallops

Dow adds 249 pts and goes above 30,000 again… the S&P adds 32 pts and kisses 3,700 while the Nasdaq added 878 pts to close at 12,464 and the Russell advanced by 44 pts and closed at the day’s high at 1,892.45. Stimulus talks cited as the reason for the push… Expiring unemployment benefits on the day after Christmas, surging virus cases, overloaded hospitals, locked down cities and now whole states (CA is locking down for 3 weeks – no in-person dining across a range of counties, no gatherings, etc… but there is pushback… different counties refusing to abide by the latest forced closure ), slowing job creation suggesting that the economic recovery is losing steam… all causing congress to ‘suddenly’ become more concerned… and I say suddenly – because what have they been doing for the past 2 months?  

All of the headlines I noted above are not NEW news – the experts predicted this, yet Congress led by Nancy Pelosi chose to make a bet… she and her coalition chose to NOT negotiate on the $1.8 tril package that the GOP offered back in October, instead countering with a $2.4 tril package that had a lot of ‘pork’ in it… and today – we learn that she is scrambling to sign a $908 bil package as the clock ticks on her vacation. You see, she (and the rest of them) is due to go on vacation this Friday… and won’t be back in DC until after the new year… so, the heat is on… and now she finds herself backed into a corner, inflicting pain on her constituents in CA and the country… so, expect to see her celebrate and pat herself on the back if this deal gets done this week – saying –

“Look what we did! We negotiated hard on your behalf and signed a deal that is 50% of what we could have signed one month ago – Isn’t that great?”

The hypocrisy is numbing… and the fact that all of these elected officials (from both sides) dragged their feet causing even more damage as the country pled for help should not be rewarded at all. Yet – the market is celebrating that a deal is in the works… even as the economy begins to struggle again and the virus surges… but the surging virus is apparently not the concern at all, because if it was, then the market would be trading lower vs. making new highs… what the market (and investors) are focused on is the coming vaccine… and this as the headlines try to prepare us for a devastating Covid Winter. Dr. Deborah Birx (you remember her, right) taking to the airwaves yesterday on NBC’s Meet the Press to remind us that:

“This is not just the worst public health event.  This is the worst event that this country will face, not just from a public health side.”

She went onto say – the virus is ‘most likely to be the most trying event in US history’… think about that… ‘the most trying event in US history’… and we’ve got a lot of history… Now what the media is quick to point out is that the latest surge is because people travelled for Thanksgiving and had dinner with their family, they also point out that people are having dinner indoors at restaurants across the country… what they completely ignore are the waves of celebrations that took place in the streets across the country – with hundreds of thousands of people – after Joey won the election… People shoulder to shoulder, screaming and yelling, laughing and crying, hugging and kissing… but none of that means anything to the experts – the surge in cases is a direct result only of Americans travelling for Thanksgiving and dining indoors and for this – elected officials are shutting down whole parts of the country.

In any event – investors are looking thru the ‘covid winter’ –  they are looking thru the devastation of small businesses and focusing on what they believe will be a very bright spring/summer/fall 2021… Analysts all over the street all singing the same song – while right now appears to be slowing and inflicting pain – the latest survey from the NABE (National Assoc for Business Economics) found that 73% of those surveyed say that the economy will return to pre-pandemic levels by the summer of 2021… and it is all predicated on the 3 or 4 expected vaccines that are coming. (never mind the improving therapeutics that are now available.)

Eco data on Friday showed that we only created 245k jobs…well below the estimate of 460k and a 60% drop from last month… (but bad news is good news), Avg hourly earnings rose by 0.3% above the estimate while the underemployment rate held steady at 12%. The Underemployment Rate is a measure of people that reflects not having enough paid work or not doing work that makes full use of their skillset. This vs. the unemployment rate which came in at 6.7% which defines a person that is out of work and looking and is unable to find a job. Factory orders, Durable goods orders and Cap Goods orders all coming in line with the expectations… so that is also bullish… and does help to feed the beast.

This morning we are seeing global markets backing off a bit and digesting the moves once again….but remember – it is December and last week we made the point that so many professional asset managers missed the boat, expected that a move lower had to happen, expected to put money to work when it did…well, the move lower only happened in small doses, as the buyers remained just below the surface – supporting the markets -which should have been the first clue, the second clue was the Biden win when the market did not back off and the third clue was the talk of the $4.5 trillion sitting in money market accounts earning nothing – leaving some of the talking heads to suggest that it ‘has to come into the market’ – which I disagree with, (it doesn’t have to do anything)  but whatever… the fact that the media makes it a topic to discuss only fuels the move higher as they make it seem that there will never be another down day on the street – which is exactly why I say – Buyer Beware…

Yes, it may not feel like that right now, but my guess is that the re-pricing will come in the new year… Once the slate gets wiped clean again… Now the event that could ignite a move lower is the Georgia Senate Race… and you can’t discount this as a non-event… because it is not… and the jury is split – but is favoring a GOP win… and that would be the best outcome and one that I think will see the market back off a bit… as the anxiety subsides… and you say – why would it back off? Because the 11% surge in the S&P since the election is a bit long in the tooth and it is also pricing in that GOP win… and so I expect a ‘buy the rumor/sell the news’ event. Now if the DEMS win or it is split with 1 DEM and 1 GOP then I think the market backs off even more as investors then have re-price what that means for regulation, technology, taxes, never mind what it will do to the far-left wing of the party. Look – Joey is silently rooting for a GOP win… Why? Because then he can tell the socialist left wing to sit down and shut up. They won’t be able to pull the party to the far left and we will end up with a moderate/center gov’t – which is the best solution for the country which is then why the market will stabilize.

European markets are trading lower… the vaccines are set to begin tomorrow in the UK… truckloads of the vaccine arriving from Brussels in preparation of distribution. In addition, Germany is set to release Industrial Production figures and the UK and the EU continue to focus on a last ditch effort to come to a BREXIT deal as Britain’s Chief Negotiator makes his way TO Brussels in a bid to salvage the discussion. (There is a lot going on in Brussels…) At 7:15 am - FTSE +0.76%, CAC 40 -0.65%, DAX -0.18%, EUROSTOXX -0.34%, SPAIN  -0.37% and ITALY -0.19%.  

Oil is under a bit of pressure this morning as the news of new lockdowns makes its way thru the markets… Now look – oil has surged some 35% since November 1… all a result of the vaccine talk and what it means for the global economy… the news that the US is getting slammed again and that CA is shutting down is not helping to confirm that story. Additionally – South Korea raised their ‘alertness’ level as cases begin to surge there as well. Expect the latest restrictive measures and lockdowns to keep a lid on prices in the near term… but I expect that this will be short lived and continue to believe that we remain in the $41.50 (trendline support) and $50 range.  

Gold holding steady at $1840/oz while Bit Coin remains aloft at $19,154/coin.

This morning futures are looking a bit lower – with the Dow down 105 pts, the S&P off by 12 pts, the Nasdaq lower by 8 pts and the Russell down 4 pts.  

The S&P closed at 3699 on Friday… talk of a $908 bill deal is what the market is anticipating – thus the economy should get a shot in the arm before the end of the year. While this is good news – the market moved higher on Friday on this news… so today expect the deal to be dissected and discussed ad nauseum… Either way – renewed lockdown restrictions are likely to weigh on the economy in the months ahead as Dr Birx told us… and while the spring summer promises to be exciting – the next couple of months could prove to be volatile causing prices to swing – offering new opportunities to put money to work. Remember we are now in unchartered territory… we are smack in the middle of a very broad  trendline channel… 3400/3900… and we are only weeks away from year end… My sense is that we have seen the years high… but remember – 3700 is just another big round number that tends to get everyone excited… the algo’s could attempt to push us up and through, but the smart money will most likely unload some of the highflyers as they expect a re-pricing in the early part of the new year. As the long-term investor – stay focused and stay the course, keep balanced.

Take good care.  

Kp

Feast of the 7 Fishes No.4 – Bay Scallops in Black Truffle Cream Sauce

For this you need: Bay scallops (the little ones), olive oil, butter, heavy cream, white wine, shallots, garlic, black truffle, white truffle oil, s&p, Brussels sprout leaves and fresh grated Parmegiana and Medium Shells (optional)

Ok – you can make this dish in 15 mins… Put a pot of salted water to boil.

In a large sauté pan – begin with a 1/2 stick of butter and a splash of olive oil – turn up the heat to med. Now add in the sliced shallots and chopped garlic…sauté in the pan for 5 – 8 mins… now – turn up the heat and add in the rinsed and patted dry bay scallops – you want to sear them quickly.

If you are serving over pasta - Add the pasta to the boiling water – stir.

Next – once the scallops are seared – turn the heat down to med and deglaze the pan with some white wine – allow it to steam off a bit – now add the heavy cream, the brussel sprout leaves and shaved black truffle. Stir well. Now add in the white truffle oil – this is key – you DO NOT need much – it is very potent… add – mix, taste. If you need a bit more than do so… but go easy – do not overpower.

Buon Appetito

[kennypolcari]

Markets in Pause Mode; World Awaits OPEC; Dems Look to Sign a $900 bil Deal – Feast of the 7 Fishes No. 2

Stocks edged higher on Wednesday – after opening lower in early trading… progress in DC on a ‘targeted’ (read much smaller) stimulus plan and word that the Brits approved the PFE/BioNTech vaccine all making the headlines… By the end of the day – the Dow gained 59 pts, the S&P advanced 7 pts the Nasdaq fell by 6 pts and the Russell added 2 pts.  

It’s Thursday… markets around the world are mixed, US futures are mixed, The Brits are celebrating over the administration and distribution of the vaccine, The Rockefeller Christmas tree was lit, news that Nancy and Chucky (Pelosi and Schumer) are now ready to accept a $900 billion stimulus plan and OPEC+ should be making some kind of decision on what’s next for oil production? Will they continue to keep the current cuts in place or not? Let’s start there…  

Analysts around the street are mostly in agreement that they will extend the cuts… the market IS pricing that scenario in place and as a result oil prices have risen substantially, some 32% since November 1st. This morning WTI -West Texas Intermediate is trading at $44.90 while Brent North Sea is trading at $48.25… Any sense that OPEC+ does NOT reach an agreement will surely send oil prices careening… and energy names lower… Like oil – energy names (XLE) have also surged in November – rising 38% for the month… so this trade remains on the ‘edge’… what will we hear? And we are expecting to hear the decision today… so hold on – it’s coming… My gut tells me that OPEC+ will extend the cuts… Look – the vaccine is now really changing the story…Why? Because it’s actually here… we’re not discussing if and when, we are now discussing now and how (to get it distributed) and that is revving up the markets… The world is about to re-open, businesses will get back to ‘normal’, cities will come alive, and demand will surge… And when demand surges – then we can expect energy needs to surge as well and when energy needs surge – we can expect energy prices to rise especially is supply is artificially held in check… Capisce?  

Next – news this morning that Nancy and Chucky are ready to sign on the dotted line are also making the headlines… But what is interesting is that they are ready to sign a $900 billion deal – this is stark contrast to the deal that the GOP had offered only one month ago (Recall that the GOP offered a $1.8 Tril deal vs. their $2.4 Tril deal) … What happened?  Is it that they are feeling the pressure finally to ‘do something’ as unemployment benefits are due to expire on December 26th?  Are they conceding a Georgia senate race LOSS on January 5th and so want and need to get something done?  Were they encouraged to make a deal by the latest Biden commentary that ‘any deal made during a lame duck Presidency is surely just a start’… Because once he takes over – he may be able to bring both sides to the table to negotiate part 2 of this deal which could see a deal that is more in line with what they really want?  And what if the DEMS win the Georgia race which puts them in complete control of the executive branch – then we can surely expect a ‘bigger’ plan on top of this $900 billion… which they could then use to say – “Look what we did! We passed a $900 bill plan and now we are passing an additional $3 tril plan! So, we got even MORE than they wanted to give us!” But understand that Sentate Majority Leader Mitchy McConnell is rejecting that plan and is now offering a $500 bill plan… Oh boy – it is a tangled web we weave…

Next we are hearing that there are a bunch of ‘smart money guys’ (asset managers) crying afoul… they have supposedly missed out on this rally and are now in a state of FOMO… (fear of missing out) which could drive prices higher over the next 3 weeks (as they rush in) … and that makes me curious… because it is exactly these guys (both men and women) that are paid to know what to do, they get paid to read the tea leaves, they get paid to be on top of it, they don’t get paid to be indecisive, they get paid to make decisions… so when I hear that they have ‘missed’ this move – it always makes me ask – What were you doing? And if you were convinced that the market would retreat and it did not – then stand by your commitment… and DO SOMETHING ABOUT IT. By the way – I too expected the market to retreat, but that does not mean I wasn’t actively managing and putting money to work in names or sectors that did provide opportunity when we saw those days of weakness. And sectors that continue to be hot – weren’t really an issue, because I had exposure, so I participated… This is NOT rocket science, but it is a discipline. FOMO should NOT be an issue for asset managers at all… and when it is – It makes me wonder… just sayin’…

This morning US futures are flat… there is nothing really new this morning that will serve to send mkts substantially higher or lower… so it is the churn – very much like what we are seeing in Europe. The headlines all suggesting that global markets ‘are pausing to catch its breath’… and that is about right… we have a substantial move up for a while now… and that has caused valuations to become a bit stretched – so two things can happen… One – the market re-prices (thus the pullback that some of the asset managers had hoped for) or Two – it can just churn in place until the economics catch up to the valuations… so – make your bet and then execute…

Yesterday’s eco data was ok… (but remember it is now December) ADP Employment Report – only showed a gain of 307K jobs vs the exp of 430K – a miss of 30%... So the sense is that maybe Friday’s NFP (Non-Farm Payroll) report could be weak as well and if they miss by 30% then that report would show 334K jobs created – remember that the current estimate is already 30% below last month’s report… so – watch out… the NFP report does carry some weight… and many in the industry will make decisions about what this means for the broader economy… Today’s eco data includes the usual suspects… Initial Jobless Claims of 775k, Cont Claims of 5.8 mil, Markit US Services PMI of 57.5 (very strong) and since we are a 70+% servies based economy – this is a highly watched number. Weakness in this number will give mkts a reason to pause…

European markets are all a bit lower this morning… At 7 am – FTSE +0.07%, CAC 40 -0.33%, DAX -0.43%, EUROSTOXX -0.14%, SPAIN -0.49% and ITALY -0.07%.  

Oil is also pausing as we await news out of the latest OPEC+ meeting… remember – expectations are for them to extend the production cuts of 7.7 mil bpd through March 2021. Now remember what the vaccine means… (see above commentary) … so hold tight… Either way – I think the range remains $40/$50 range… If they don’t reach an agreement – a fall to trendline support would not be out of the question… Current cuts are priced in, extending some cuts or increasing supply by a little – is slightly bearish… and if they don’t reach a deal at all – the BOOOMM! (while possible, NOT likely). Watch the clock – meeting starts at 8 am EST… we could get news around noon… if noon comes and goes, then look for oil to weaken… Just my thoughts…

The S&P closed at 3669 yesterday (another new high). This morning it feels like it wants to march in place… maybe pull back and churn. News of out DC and news out of Vienna (OPEC) will be the focus… The jury is still out… did the Santa Claus rally already happen or are we in for a December surprise? You know how I feel – so it would not surprise me to see the markets churn into year end… Get ready for the second Christmas eve fish dish – see below.

Take good care.  

Kp

Feast of the 7 Fishes – No. 2 Linguine & Clams

I have included my YouTube video of me making this dish – It has all the ingredients and you get to see me live and in color – is there anything better?

Click here to watch.

In it I tell you it is the 1st of the 7 – whatever – Order is not important… In the end – we make 7 different dishes…

Buon Appetito

[kennypolcari]

Has Santa Already Come or Is He on His Way? Try the Linguine in Lobster Sauce

Good morning America, Good afternoon Europe and Good night Asia… global markets continue to churn and thrash around as the year comes to a close… Monday’s weakness, turned into Tuesday’s strength – with the S&P and Nasdaq notching new highs as the closing bell rang… the Dow took back 185 pts, the S&P added 41 pts, the Nasdaq gained 156 pts and the Russell advanced by 16 pts… The news? Nothing more than what we already know… and that – I am assuming – will be the story for the next 4 weeks as the world looks to celebrate the holiday season and ring the bell on 2020 while welcoming a new year, a new world and a new way of living, learning, working and even investing…

Expect the conversation to revolve around the pace and distribution of a vaccine here and around the world, then expect more talk about the lame duck presidency of Donald Trump and the final orders/pardons/issues that he is sure to create on his way out the door, expect to hear what the new President Elect Biden has in store for members of his cabinet and administration, his plans for the country, his plans for controlling the virus, regulation, taxes and trade policy,  and then expect to hear more about some form of additional stimulus for those most impacted by the latest gov’t  shutdowns across the country… think – LA, Chicago, NYC, NJ, WI etc. In fact – Joey told us in a press conference yesterday any stimulus package passed during a ‘lame duck Presidency’ would only be a start… which would leave you to believe that he has plans for even more once he moves into 1600 Pennsylvania Avenue on January 20th.  

With that in mind – there should be no reason to dramatically change your plan or your investment thesis – just yet… Remember – Joey and Mitch McConnell have spent more than 40 years in the Senate – so the markets and the country are hopeful that they will both play nice in the sandbox and work together to move policy forward.  We’ll see…

In any event – it is December… and Santa Claus is alive and well… history shows us that December is usually an UP month… for a number of reasons… and Tom Lee of Fundstrat & CNBC fame (along with many others) tell us that this December should be no different… He expects the markets to advance ANOTHER 3% from here! (And just fyi – He’s pretty good… in fact – he’s very good at market intelligence). In any event – the message? Don’t fight the FED, don’t fight the tape and the path of least resistance at the moment is UP… (key words: At the moment)

Now look! I’m not telling you what to do – but I am telling you that considering what we have been through this year – the markets (around the world) have not collapsed (and we can surely thank the FED and many other central banks)– which says a lot. I’m also not telling you that the market isn’t overbought – because by so many measures it is… so what I am telling you is that you should not get drawn into the fray without understanding your own ‘risk’ metrics. Understand that bull markets get to a point where exhaustion sets in, the same way that bear markets get to a point where opportunity sets in… which is why – as a long-term investor – you should not be playing that ‘time the market’ game. You need to have a plan and then stick to it.  

Your portfolio should reflect who you are – and your conversation with your advisor should be an ongoing one… investing is not static by any stretch of the imagination. It should be and remain dynamic – because as the world changes so do stocks…

4 of the S&P sectors have performed beautifully year to date – Tech (XLK) +36.4%, Consumer Discretionary (XLY) + 26%, Communications (XLC) + 24%, Basic Materials (XLB) +16% all up double digits… while Energy (XLE) is still off 38% even after its recent rally.  Financials (XLF) -8%, Utilities (XLU) -2%, Rounding it out – Industrials (XLI) +7%, Consumer Staples (XLP) + 7%, Healthcare (XLV) +8%.  Growth (SPYG) +28% has way outperformed Value (SPYV) -3%, but many now think that that is about to change….and not that growth will implode, only that value will see better days ahead…. Now – it’s anyone’s guess – but you can bet that it’s gonna be exciting.

Cyclicals, Financials, Energy & Small/Mid Cap, both US & International’s, Value are all sectors that are projected to perform well as the world recovers. In fact – the Russell (small cap./mid cap) has surged of late (in anticipation) and is now up 11% ytd… after struggling for much of the year, and Value while still negative on the year is expected to lift its head. Now that does not mean that Tech or the other strong performers are doomed…not at all, but what it does mean is that the new year will most likely bring new ideas and with that new opportunities.

This morning we learn that – Asian markets ended the day mixed, European markets are off to slightly weaker start and US futures are pointing lower…. the vaccine news continues to dominate the headlines. The UK now the first country to approve and begin to disseminate/administer the PFE/BioNTech vaccine… plans for a rollout now in full speed mode… Aged and most at risk are first in line – as they should be and then the early indications are that it will pass thru the country in 5 year age increments… starting high and moving lower… as more and more supply comes to market… conversations about how the US will distribute a vaccine is next in line… many now suggesting that it will be state by state vs. a federal mandate… which is sure to cause unrest and concern among many, but it is what it is and we have to start somewhere – and as far as I’m concerned we should protect the aged and the ‘most at risk’ and move on from there. While this is happening – the rest of us can continue to live our lives by adhering to the latest CDC guidelines etc. I mean – use your head for something other than a hat rack!  

US futures are down – at 7 am – the Dow is down 140 pts, the S&P -8 pts, the Nasdaq is -25 pts and the Russell is -6 pts… Treasury Secretary Mnuchin and Fed Chair Powell are expected to once again appear before congress to detail what they think should be the next move… Mnuchin wanting a smaller more targeted plan, while Powell just WANTS a plan! And not to be outdone – newly nominated Treasury Secretary Yellen – wasted no time chiming in – suggesting that we need a big plan that is focused directly on those MOST affected – (Did you expect her to say that we need to help those not affected?)

Yesterday’s eco data was strong… which is what also helped the mood… today’s eco data includes ADP Employment Report – exp of 430K new jobs created – and this is in line with what we are expecting Friday’s NFP (Non-Farm Payroll) report to show. Expectations for that report are for us to have created 486K new jobs… in any event – we are not expected to see the huge jumps that we have seen in the past 3 or 4 months… Unemployment is expected to go to 6.8% down from 6.9%. Mortgage apps this morning apparently rose by 9% - confirming the story that the housing remains a HOT sector…

European markets are all a bit lower this morning… Eco data: Germany to report October Retail Sales while Italy reports their latest unemployment rate.  BREXIT discussions continue – big differences remain leaving any deal hanging in the balance.  At 7 am – FTSE +0.13%, CAC 40 -0.23%, DAX -0.33%, EUROSTOXX -0.24%, SPAIN +0.25% and ITALY -0.57%.  

Oil is under a bit of pressure – down 17 cts at $44.38/barrel… the API (American Petroleum Institute) reporting that crude inventories rose by 4 mill barrels vs. the expected draw down of 2.4 mil barrels and OPEC+ has postponed any discussion of output policy until tomorrow. Today we will get the IEA (Int’l Energy Admin) reports on the state of oil inventories as well. We remain well above support at $41.50… and will most likely remain in the $40/$50 range.

The S&P closed at 3662 yesterday – after trading as high as 3678! This morning it appears that at least around the opening… the markets will pull back and churn. Investors are excited about what 2021 will bring for the markets and for earnings and eco data… all analysis suggests that there are better days ahead and for the long term investor – taking advantage of any pullback would be advisable… Remember – many analysts are suggesting that December will see a surge into year-end… Again – in my opinion - Santa has already come… it would not surprise me to see the markets churn into year-end… And that is what makes a market – diversity of thought!

Take good care.  

Kp

Ok – it’s December and for those of you who know me – Christmas Eve is my favorite night of the year… and in an Italian household it is the night of the 7 fishes - known as 'La Viglia'.

Every year in the U.S and around the world, many people celebrate the Feast of the Seven Fishes on Christmas Eve… The ancient tradition of eating fish on Christmas Eve dates from the Roman Catholic custom of abstinence from meat and dairy products on the eve of Christmas. And so you ask – Why 7?  Great question – to which there is no one answer.  There are several religious theories to explain it - there are 7 sacraments in the Roman Catholic church; 7 is the number that appears most frequently in the Bible, or is the most significant (it took 7 days to create the earth, there are 7 deadly sins, the number 7 represents perfection). No matter the reason – I am about to give you the 7 different dishes that we prepare on Christmas eve. I hope you enjoy…

No. 1 Linguine in Lobster Sauce

Today's recipe represents the first dish:  You will need: 2 live lobsters, garlic, crushed tomatoes, onions, basil, s&p.  

Start with the basic marinara - Sauté crushed garlic in olive oil on med heat - do not burn the garlic… now add 2 large slice Spanish onions (or Vidalia if you can get them) and sauté until soft - about 10 mins or so...

At this point add 3 cans of kitchen ready crushed tomatoes - NOT PUREE - if you can't get kitchen ready crushed - then buy the plum tomatoes in juice and run them thru the blender or food processor - leaving a bit chunky... Bring to a boil - season with s&p, and fresh basil - stir.  Once it boils - turn heat down to med low and prepare to add the lobsters.

First rule - Always use live lobsters. (Should be like 1 1/2 pounders each). Rinse under cold water – Once you rinse him/her... remove the rubber bands and put in sauce claws/face first...now he/she may flap its tail - but that is only for a second or two... Add second lobster.  Stir and make sure that the lobsters are submerged in the sauce and turn heat to simmer... allow to cook for about 30/45 mins. Now if you are making this the day before - remove from heat, let cool and then refrigerate. The next day - take out of fridge and let come up to room temp and then slowly re-heat on simmer… You can just smell the goodness and feel the ocean waves hitting you in the face...

Bring a pot of salted water to a boil - add the linguine and cook for 8 / 10 mins or until aldente. Strain - always saving a mugful of pasta water - and return to pot. Add back about 1/4 of the water and stir to re-moisten... do not soak... capisce? Now add 3 ladles of sauce and toss... Serve immediately - making sure that you have grated Pecorino Romano cheese on the table for your guests.  If you like - you can remove the tail/claw meat - shred and add to sauce or you can just present it on a plate for your guests to enjoy...

Buon Appetito.

[kennypolcari]

What does Joey really want? Try the Chicken Breasts in a Mustard/Mascarpone Sauce

Stocks took a breather yesterday and ended the day lower as November came to a close. And this should not be a surprise… Look – let’s be honest… the recent surge up to all-time highs is a bit ahead of itself… or was a bit ahead of itself… All this talk of a vaccine – igniting the excitement as investors, algos and traders go all in, the investor psyche now firmly in place that stocks can never go down! (Oh boy… that’s usually a sign of a market top) … and while the day ended lower – the Dow gave back 272 pts or 0.9%, the S&P lost 16 pts or 0.46%, the Nasdaq gave back 7 pts or 0.06% and the Russell lost 35 pts or 1.6%... the month ended higher… with the Dow gaining 12%, the S&P gained 10%, the Nasdaq added 13% and the Russell was the star performer – surging 22%! It was an incredible performance for sure… and just think – we got nothing from Washington in terms of more help for all of those people that have been put out on the street by the virus.  

But – according to all of the macro data – the US economy is doing just fine – no matter that major cities around the world have gone dark and more than 13 million people are out of work. Recent commentary by Fed Chair Jay Powell only reiterating his concern… (but the macro data of late runs completely counter to this thought…)

“Even the best case, widespread vaccination is months in the future, and there is a risk that people will lose confidence and pull back from economic activity in the near-term as the virus spreads and they try to avoid infection. The rise in new Covid – 19 cases, both here and abroad, is concerning and could prove challenging for the next few months….”

While Jay may be right about when the vaccination actually gets here – My gut tells me that he is clearly wrong about the economic activity… Many of the most recent data points stronger than the expectations… CPI, PPI, Avg Hourly Earnings, Avg Weekly Earnings, Retail Sales, Industrial Production, Capacity Utilization, Housing Starts, Building Permits, Existing Home Sales, Regional Fed Surveys, Manufacturing PMI’s and Service PMI’s and the list goes on… and the weekend spending spree confirms that the consumer is not dead by any stretch of the imagination…

Did I tell you that Black Friday produced online sales in excess of $9 billion and that yesterday’s Cyber Monday is estimated to have produced another $11 billion in online sales… and remember – Cyber Monday is now Cyber Week and in reality, what the virus has shown us is that not only can we work remotely, but we can shop remotely… and shopping and working remotely is what the world is doing. Americans are not being held back and while they may not be going out to shop -they ARE shopping, which means they must have money to spend…

The work from home names and the tech names that have changed the world have gotten bid up – as investors scramble for new ideas… Zoom – which is now a verb and a noun – is up 612% –down a bit from being up 722% in mid-October… trading at what can only be described as ridiculous valuations. But remember – a stock like everything is worth what someone is willing to pay… Yesterday – they reported another quarter of record sales and raised its outlook as the virus causes more remote working and learning… but with this comes higher expenses that the market was not expecting and this morning the stock is down 5% as investors and traders take money off the table – leaving some to ask – What happened?  How come its going down?  

Now – if you bought this stock in October when it was trading at $590… then yes, you are NOT happy right now… but in retrospect – you got caught up in the mania… fundamental analysis be damned! But if you are a longer term investor and you liked it at $590 – and you still believe it’s in the right space – then you gotta love it at $450… and if you wait a bit longer – you may even be able to pick some up at the trendline… $390. And if you bought this back in March at $115 then maybe you should consider peeling some off – keeping a core position (if you still like it) and re-investing that found money in something else.  

Yesterday’s action does tell us is that the latest rally is not immune from any setbacks… and while yesterday’s setback was honestly nothing… it does remind us that the tone can change on a dime. Is the market fully pricing in a widely available vaccine? I think yes. Is the market pricing in a new stimulus package? I think mostly, but maybe not fully yet. (Because you know it’s coming – which is why futures are surging this morning). The question is just how big? And again that depends on Georgia…

And that brings up the next political issue… What does Joey really want? Does he want a Democratically controlled executive branch? Does he want to have to deal with the far-left mindset in that case? Would he rather have a GOP Senate that would actually help him control the socialist agenda being pushed by Sanders and Warren? Because you know – if the DEMS take Georgia, then it will ignite the far left and Joey will have to address how he handles this wing of the party. If he doesn’t support them, then there will be hell to pay… and if he does support them – then the market will have hell to pay… which is why I say – slow down… if you are invested in the market – then sit back… enjoy the ride… and if you are just getting started – ease in… begin to build the plan and talk to your mentor/advisor.

Now this morning – US futures are acting like they have amnesia… any of the issues that concerned the market yesterday once again only a memory. Futures are surging this morning – talk of congress coming together on a stimulus bill, news that Pfizer/BioNTech are seeking regulatory approval from the EU and if they get it – BioNTech says that the first doses are only ‘hours away’, strong eco data out of Asia is also helping the global mood and it is December 1st… and many are still saying that Santa hasn’t even come down the chimney yet… (a point I would clearly argue – as I think not only has he come down, but he has already put the toys out…) At 7 am – the Dow is pointing up by 350 pts, the S&P looking to add 40 pts, the Nasdasq is up 125 pts and the Russell is ahead by 30 pts… and while this is great… it still leaves us below last week’s exciting high… and a level that I think will prove to be the 2020 highs. Investors are now looking forward to the spring of 2021… and they expect earnings to be strong… and prices today reflect that assumption… what the market will need is for 3rd and 4th qtr earnings of 2021 to be strong as well, if this rally is going to continue on pace… What is also needs is for inflation to remain low so that the FED is not forced to move rates… and while I don’t see that being an issue in the next 6 months, I am concerned that that story will change by next summer… I am still not a believer that current rates can or will remain this low through 2022… I just don’t see it – have you seen commodity prices? Lumber, Cocoa, Sugar, Corn, Palm Oil, Hogs, Wheat, Soybeans, etc… My fear is that once inflation takes root – it will spread like wildfire… (and in fact – I would argue that underlying inflation is already alive and well…)

Eco data today includes Markit Manufacturing PMI – exp of 56.7 (already a strong number so anything greater than that will suggest an even stronger expansion… which will lead to… higher prices… which equals… inflation), ISM Manufacturing PMI – exp of 58! Construction Spending of +0.8%.

Treasury Secretary Mnuchin and Fed Chair Jay Powell – due to appear on the hill today… both detailing what they view as the state of the union… Expect Mnuchin to paint a more robust outlook while Powell will express his concern.   

European markets are all higher… buoyed by the stronger Asia macro data (China’s Caixin PMI index at 54.9 – the highest reading in 10 years) and the fact that Eurozone inflation data remains in negative territory for the 4thmonth… only strengthening the case for more stimulus from the ECB (European Central Bank).   At 7 am – FTSE +2.02%, CAC 40 +1.03%, DAX +1%, EUROSTOXX +1.04%, SPAIN +1.08% and ITALY +0.39%.  

Oil continues to get tossed around as we wait for more news out of OPEC +. Talks of production cuts have been put off until Thursday as the infighting continues over who gets to pump what at what pace and will demand come roaring back as many expect.  Oil is trading at $45.42 and remains well within the $40/$50 range. Patience is a virtue. Sit tight.  

Gold has rallied back – now trading above $1800/oz… as it attempts to retake the trendline at $1817… I suspect that $1817 will represent resistance now… as gold tries to build a base. My guess is that we are now in the $1750/$1817 range.  

And Bitcoin continues its surge to $20,000… as the media is now parading every bitcoin investor across the platforms suggesting that this is it… Some calling for $100,000 by year end 2021 while others – Winklevoss twins suggesting it will be a $500,000/coin asset at some point…

The S&P closed at 3621 yesterday and this morning it appears as if it is going to challenge its all-time high of 3645… and if US markets follow European markets – we can expect moves of +1%-ish today. That being said – investors are excited about what 2021 will bring for the markets and for earnings and eco data… all analysis suggests that there are better days ahead and for the long-term investor – taking advantage of any pullback would be advisable… Again – in my opinion - Santa has already come… it would not surprise me to see the markets churn into year end…

Take good care.  

Kp

Chicken Breasts in a Mustard/Mascarpone Sauce

For this you need: 1 1/2 pounds boneless skinless chicken breasts, s&p, olive oil, butter, 1 chopped onion, 1 container of sliced button mushrooms, sliced garlic, 1 cup dry Marsala wine, 8 ounces mascarpone cheese, 2 tablespoons Dijon mustard (not grainy), fresh chopped Italian parsley leaves for garnish.  

Sprinkle the chicken with s&p. Heat the oil in a large heavy skillet over high heat. Add the chicken and cook just until brown, about 4 minutes per side. Transfer the chicken to a plate and cool slightly.

While the chicken cools, melt the butter in the same skillet over medium-high heat, then add the onion and sauté until tender, add the mushrooms and garlic and sauté until the mushrooms are tender and the juices evaporate, about 10 -15 minutes. Add the wine and simmer until it is reduced by half, about 4 minutes. Stir in the mascarpone and mustard. Cut the chicken breasts crosswise into 1/3-inch-thick slices. Return the chicken and any accumulated juices to the skillet. Simmer, uncovered, over medium-low heat until the chicken is just cooked through and the sauce thickens slightly, about 2 minutes. Stir in the chopped parsley. Season the sauce, to taste, with salt and pepper.  

Serve this with a large mixed salad dressed in fresh lemon juice, olive oil, seasoned with s&p, and some dried oregano.

[kennypolcari]

Dow Makes History – Consider Giving Your Time... Try the Bacardi Cookies

***DOW 30,000!***DOW 30,000***DOWN 30,000***DOW 30,000***

US markets were on fire… it is BOTH Thanksgiving AND Christmas! I mean it is 2020, anything can happen, and it appears that even though the Macy’s Thanksgiving Day Parade is not happening – Santa did arrive on his sleigh!

Stocks surged! All eyes on what the Dow would do yesterday was the chatter – we were so close to a big round number, futures were pointing higher… would it happen? Would today be the day?  And it did not disappoint… Investors/traders and algo’s took it higher… and at 11:48 am on Tuesday November 24th – it traded above a new round number – 30,000 and by 4 pm it closed above a new round number as well. By the end of the day – the Dow added 454 pts or 1.54% to close at 30,046. The S&P added 58 pts or 1.6%, the Nasdaq surged by 156 pts or 1.3% and the Russell advanced 36 pts or 1.9%.  

Flashback and Flash Forward –

Winter of ’80 – Carter out, Reagan in – it was an economic mess…

The Dow was trading at 792 in the summer of ’82 – when the greatest bull market of our lifetime was born… I was 20 years old and a kid without a care… today (only 38 yrs later) –  I am 59 yrs old with more cares than I care to count! Things that did not exist in 1982 – are all the rage today… Technology, the Internet of Things, Electric Cars, Hydrogen Cars, Self-Driving Vehicles, Artificial Intelligence, Alexa, Siri, SpaceX, Tesla, FAANG stocks (replaced the ‘Nifty Fifty’ – hahahaha… now you know the millennials and Gen Zer’s have no idea what those were) and this thing called Bitcoin (which is challenging how we think about money)

And now the whole idea of communicating and communication stocks has been completely redefined… AT&T which was considered the ‘mother of all stocks’ was also considered a monopoly in 1982 – and in 1984 congress broken it up – Out of that breakup – 7 new ‘state of the art’ companies were born (None of which exist today) … Who remembers that? Who can even name them? They were – NYNEX, Pacific Telesis, Ameritech, Bell Atlantic, Southwestern Bell, BellSouth, and US West. Today congress considers another set of breakups – some of the FAANG stocks – but not because they are monopolies per se, but because they have gotten so big and so invasive that they are trying to regulate who does what, who knows what, who can say what and who has ANY right to privacy. Yes, these are only a fraction of the concerns – and this story is still in the first chapter – but that is about to change… Strap in…

Since then, we have had a peanut farmer (Carter), an actor (Reagan), a father and a son (Bush and Bush) a Governor of Arkansas (Clinton), a Jr Senator and the first African American (Obama) and a reality TV host (Trump) and now the oldest and longest serving member of Congress (Biden) as President. We had Walter Mondale select Geraldine Ferraro for VP in the 1984 race (they lost) we had John McCain select Sarah Palin in 2008 (they lost) and in 2019 we had Biden select Kamala Harris (an Indian/Black American) and they won! We have lived thru 2 massive crashes – (’87 where we lost 22% in 6 hrs and 2007-2009 – where we lost 65% in 2 yrs), we saw the birth of the internet and this thing called the WWW (World Wide Web), the dot com boom and bust, the turn of the century, terrorist attacks, wars, more terrorist attacks and more wars… and in 2007 saw the beginning of the complete collapse of the global financial system, central banks around the world ran to the rescue and pumping in so much Kool Aid we have no idea what’s next… and in 2020 – the world got hit with a pandemic – a virus that swept the globe and caused whole countries to ‘go to sleep’ causing untold damage both financially, personally and physically… Citizens around the world lost their fight to this virus as we raced to find a cure… and the world prays for them… and the list goes on… but the Dow, the S&P, the Nasdaq and the Russell continued to represent opportunities for investors around the world… It is the true American Story and Dream… It is what binds us… And last night at 4 pm – American Capitalism made history again… The WSJ makes the announcement in this morning’s paper… It is a global headline… not just an American story!  

“Dow Eclipses 30,000 For the First Time”

And so it is… it is an amazing time to be alive, and it is an amazing time to invest.  

Today – there isn’t much more to say about the markets… the issues of yesterday are the same issues today… the Virus, the Vaccine, The election, The transition, Holiday travel, blah, blah, blah… Investors and markets will deal with it… This morning global markets are churning… US futures are not doing anything dramatic… Dow -61 pts, the S&P off 3, the Nasdaq up 32 and the Russell down 5.  

Eco data today is a full plate… Mortgage Apps, Initial Jobless Claims – exp of 730k, Cont Claims of 6 mil, Wholesale Inv, Retail Inventories, 3rd Qtr GDP (first peek) – exp of 33.1%, Pers Consumption of 40.9%, Durable Goods exp of 0.9%, Personal Income -0.1%, Personal Spending +0.4%, New Home Sales m/m – exp of +1.7% and at 2 pm – the FOMC minutes – nothing new here… they continue to tell us that rates will remain low thru 2022 – Whatever!  

European markets are a bit lower (churning) while Asian markets were mixed.  

Oil is up 18 cts, at $45.08.  Gold while up $6 today at $1816 has gotten absolutely clobbered of late… down 14% since the August high of $2100 as money left this safe haven and plowed into equities. It does appear though – that it is trying to hold onto the trendline at $1816… we’ll see…

The S&P closed at 3635! It did tease the most recent high at 3645… and failed… (not surprising) … it’s only a matter of time.  Look, the WH fight is all but over, the vaccine only weeks away from being available, news of a Biden cabinet coming together and the upcoming FED meeting where no change is expected will all drive the short-term move… Santa has arrived, now will he stick around and keep giving away toys or not? We’ll see.  

Today begins the Thanksgiving Holiday – let us be thankful and grateful for what we have. Let the fortunate reach out and help the less fortunate – consider donating time at a food bank tomorrow, consider sharing food that you have with those that have less, consider buying a thanksgiving meal for a family in need – consider those less fortunate than you.  

And while we say ‘Happy Thanksgiving’ it almost seems inappropriate considering how so much of the country is in despair… consider reaching out.  

Take good care.  I am off until Monday… Stay safe and wear the mask!  

Kp

Bacardi Thanksgiving Cookies

So at some point you just gotta laugh - so with that in mind - try these great cookies…

If you make it through the recipe – then you’ll love the cookies…

You need: 1 cup of water, 1 tsp baking soda, 1 cup of sugar,1 tsp salt, 1 cup of brown sugar, 4 cup flour, 4 large eggs, 1 cup nuts, 2 cups of dried fruit, 1 liter of Bacardi Gold Genuine Puerto Rican rum.

Sample the Bacardi to check quality. Take a large bowl, check the Bacardi again, to be sure it is of the highest quality, pour one level cup and drink.

Turn on the electric mixer. Beat one cup of butter in a large fluffy bowl.

Add one peastoon of sugar. Beat again. At this point it's best to make sure the gold rum is still ok, try another cup just in case.

Turn off the mixerer thingy.  Break 2 leggs and add to the bowl and chuck in the cup of dried fruit. (Pick the frigging fruit off the floor.  Mix on the turner).

If the fried druit gets stuck in the beaters just pry it loose with a drewscriver.  Sample the Bacardi to check for tonsisticity. Next, sift two cups of salt, or something. Check the Bacardi…

Now shift the lemon juice and strain the nuts. Add one table. Add a spoon of sugar, or whatever you can find. Greash the oven. Turn the cake tin 360 degrees and try not to fall over. Don't forget to beat off the turner.

Finally, throw the bowl through the window, finish the Bacardi rum and make sure to put the stove in the wishdasher...

Enjoy!

[kennypolcari]

Yellen Makes History Again; Progressives Force Feinsten Out, Oil 'Gushes' – Try the Pumpkin Risotto

I made it clear in yesterday’s note… the focus was once again the Covid Monday Trade! More good news out of the biotech world, and that was enough to set US markets on fire even in the face of various lockdowns and new restrictions on Americans… The rotation into cyclical value names continues and news that the Trump administration is now working with the Biden transition team (for what should be an orderly transition) helped to fire up the markets. Then at about 3 pm –  Joey announced that he will nominate former FED Chair Janet Yellen to be the new Treasury Secretary and that news only stocked the fire… Recall that it was Janet who suggested that the FED be allowed to BUY STOCKS during the height of the great financial crisis! The Dow surging by more than 1.1%, the Russell ahead by 1.85% while the S&P and Nasdaq played a supporting role up 0.56%n and 0.22% respectively.    

Better macro data also helped to fuel the advance but be careful what you wish for…

You see the Manufacturing, Services and Composite PMI’s (Purchasing Manager’s Index) were ALL better than expected – and that is bullish, but it is also a sign that the inflation monster may be getting ready to rear its UGLY head (and when it does, it is sure to be very UGLY) … You see, The Manufacturing Purchasing Managers Index – is a report on the state of business in the Union (the Union here being the USA) – and it is a number that is closely watched by everyone… Including the algo’s. The monthly questionnaire is used to identify M/M changes in 10 segments.  

New Orders, Production, Employment, Supplier Deliveries, Supplier Inventories, Customer Inventories, Prices Paid (are companies paying more or less for products and services) , Backlog of Orders, New Export Orders and Imports.

Now notice the bold typeface… because that is the key to this issue. Are companies paying more for products and services? Because if they are – guess what? Those increases will be passed onto you – the consumer… are you following me? So if the company passes on higher costs to the consumer, that means that the consumer is paying more for the same product month over month. And the definition of inflation is: The general increase in prices and the fall in the purchasing value of money – and for some people in the gov’t – who already think that inflation is non-existent – all I can say is – have you gone food shopping lately?  

Anyway – if inflation begins to boil over then my bet is that any control mechanism will malfunction (meaning that the FED will be unable to control it…) – my sense is that as prices begin to rise, they will rise quickly and then the FED will have to raise rates in FULL percentage point moves… None of this ¼ of 1% stuff… and when that happens… well, do I really need to tell you what’s next? Just think of all the money that every central bank around the world has contributed to try and stabilize the global economy… it has been UNPRECEDENTED and at some point it will be time to ‘pay the piper’. And now you want to know why Bitcoin is piercing $19,000? Is Bitcoin the new canary in the coal mine?  

Do I need to remind any of the baby boomers (or teach any of the millennials or Gen Zer’s) what it was like the last time inflation spun out of control? It was the early 80’s, we had just come out of the Carter Administration – the economy was a MESS… a complete MESS.  Unemployment was 10%, INFLATION WAS 14.76% and interest rates were… 20%! Risk free savings… just go to the bank and give the man your money and you were guaranteed to earn 20% – sleep at night, no risk! Now, I’m not being dramatic here at all, everything I just told you was true in 1980… and History DOES have a way of repeating itself… Look – rates have been at unrealistic low levels – zero or negative – for a decade now… inflating a range of assets… but once that music stops playing – it STOPS PLAYING… Capisce?

Right now, you put all your money into the market because you can’t earn any money on savings… well if suddenly you can earn 6%, 8%, 10% (or better yet 20%) on your money in the bank with no worries – mmmm – You tell me what’s next! And don’t think it can’t happen – my sense is that when it starts it will happen fast – which is why I think it is illogical for the FED or anyone else to suggest that rates will remain low through December 2022 (yes, they say it, and yes it soothes the markets at the moment – but in my opinion – there is no way that rates will be at this level in December 2022 – Anyone care to take the other side of that bet?) It’s too long of a bet, so much can happen that will change the plot of the story… (and we can start with the new administration and the policies that are being floated – that’s not a negative, it is just a statement of fact) Now that does not mean that you change your strategy right now – it just means – long term investing is NOT static, it is dynamic and you need to make sure that you’re your advisor is as dynamic as the markets. Look, I’m a BOOMER, I’ve been through a couple of the cycles. Don’t hate the gray hair or the white beard…

Overnight – markets around the world got to react to the Janet Yellen news… and it is significant news… She is considered fairly dovish… she was a great FED chair during a very difficult time in the history of the country and the world… the idea that she is now going to break this glass ceiling and become the first woman Treasury Secretary after being the first woman FED chair is significant and exciting for her and for the country. She is a great selection – and it would be very difficult to see how the Senate would NOT confirm her in this role. And so markets are surging…

US futures are on fire… the Dow up 302 pts, the S&P’s are up 28 pts, the Nasdaq is up 40 pts and the Russell is up 28 pts… Today it is about the ‘smooth transition’ and the newly named cabinet picks for the incoming administration. The sense is that Yellen is market friendly, she is a known commodity, she is a good communicator, and it appears as if Biden has signaled that he is focused more on the economy vs. aggressive regulatory policy – and the market likes that. And yes, while the virus and the vaccine remain on the stovetop, the focus today is on the developing cabinet. Expect to also hear more about what is going on in Georgia… in terms of that state’s Senate runoff.

And this morning we are learning that 87 yr old, CA Democratic Senator Diane Feinstein is stepping down from her leadership role on the Senate Judiciary committee ‘after facing blowback from the progressives’ for not being more aggressive during the ACB (Amy Coney Barrett) Supreme Court Confirmation Hearings – More aggressive? She could have screamed and yelled all she wanted to, the fact is that the GOP was in control so the outcome was known… I guess the ‘progressives’ didn’t understand the rules. And that is sure to be news… or at least it should be – let’s see which channel picks up the story – because it foretells what we can expect from the far left within the party… They were unhappy with her and so they forced her out… OK – so who is next? How will Joey handle the dissension within the ranks?  Because you know it is coming… They have made it very clear that they intend on hi-jacking the party. Which is why the Georgia race is so important – it’s about checks and balances – that’s all… It keeps everyone honest… (if that’s possible).    

In Asia – investors there are celebrating… Japan which was closed for a holiday on Monday played catch-up and soared by 2.5% while Hong Kong was up 0.39%, China was actually a bit lower – 0.61% and the ASX +1.26%.  It was more of the same… the virus, the vaccine and now the news that the US transition has begun… and the Yellen news? Investors are loving it!  

In Europe – markets across the region are up better than 1% as the Europeans vote with their Euros and go RISK ON. Germany reports that 3rd qtr GDP rose by a record 8.5% – this after the 2nd qtr fell 9.8% as the pandemic brought that country to a virtual standstill. Now – there is some concern that the 4th qtr will cause a bit of a pullback in Germany and across the region as the second set of lockdowns takes hold.  But, while that might be true, it is also temporary… so don’t get all worked up about it. At 6:30 am the FTSE +1.17%, CAC 40 +1.42%, DAX +1.07%, EUROSTOXX +1.21%, SPAIN +1.20% and ITALY +1.53%.

Eco data today includes: Housing Price Index of 0.8% and a lot of CoreLogic housing data, not usually market movers. We will also hear from the Richmond Fed… exp of 20.

And Oil!!! Oh, boy – it is on a run… up another 50 cts/barrel or +1.2% piercing up and through $43 to trade at $43.56/barrel… it is more of the same… the progress on the vaccine, the logistics and distribution plan  and the excitement that that is bringing, the Biden Transition now under way, the excitement about Joey’s recent cabinet picks, and the fact that ‘mobility data’ is suggesting that airplanes and cruise ships and freight transports are on their way back baby… all adding to the excitement.  We are approaching the August highs of $45… leaving us smack in the middle of the $40/$50 range… a range that feels like normal… (if there is such a thing).    

The S&P closed at 3577 – up 20 pts… after testing as high as 3589… just 11 pts shy of the next century mark of 3600… A level that we will pierce as the opening bell rings at the NYSE… 3645 is the early November high and it is very possible that we challenge it and attempt to push up and through. Now – December can be a volatile month… but with the WH fight all but over, the vaccine only weeks away from being available, news of a Biden cabinet coming together and the upcoming FED meeting where no change is expected all on the horizon – we will mostly likely see the famed ‘Santa Claus Rally’ into the end of the year… I can’t wait to ‘ring the bell on 2020’ – time to move on!  

Take good care.  

Kp

Pumpkin Risotto

In keeping with the Thanksgiving theme - Today's recipe could be another first course option - if the lasagna is not to your liking -  

Start the Thanksgiving meal with Pumpkin Risotto… it is a hearty dish, and quite filling – so just serve up a taste for your guests to enjoy.  

For this you will need: Pumpkin puree – not pumpkin pie filling, olive oil, 2 large shallots, thinly sliced, 1 1/2 cups carnaroli rice, ½ cup white wine (dry not fruity),4 c of chicken broth, heated to a simmer, heavy cream, butter, pepper, fresh grated Parmigiano-Reggiano cheese, finely chopped flat-leaf parsley,

Heat oil and a dollop of butter in a large pot over medium-low heat.  Add shallot and cook, until shallot is softened, about 7 minutes - (remember to stir).  Add rice and cook, stirring constantly, until rice is translucent, about 8 minutes.

Now add wine and cook until wine is mostly absorbed, then add 1 ladle of broth and stir, until liquid is mostly absorbed, when almost completely absorbed – repeat the process again… now add pumpkin and stir to combine. Add remaining broth one ladle at a time until fully absorbed before you add more… (capisce?) do this until rice is tender yet still slightly firm to the bite…in fact you may not use all the broth. Depends on how much rice you used…

When complete – fold in about ¼ c of heavy cream… (You can always taste and add more if you like) another tblsp of butter, season with pepper to taste (do not add salt – the cheese should be salty enough). Divide risotto among warmed bowls sprinkle with parsley and serve.   Now to make a real impact – shave some cheese over the top then sprinkle with the parsley… Serve immediately

Outstanding!  Buon Appetito.

[kennypolcari]

More Good Vaccine News – Try Nana's Cheesecake

And so the news about the ‘disagreement’ in DC between Treasury Secretary Stevey Mnuchin and FED Chair Jay Powell took a bit of a toll on stocks on Friday… and the surge in new infections didn’t’ help, either. Dr. Fauci all over the tube telling people to ‘shelter in place’, ‘reconsider your Thanksgiving travel plans’, ‘Don’t do it’, while others warned of a Thanksgiving dinner with family will result in Christmas funerals… OK – That’s not helpful… and btw isn’t working anyway… Yesterday – we learned that more than 2 million people travelled by air… and more are expected to hit the road this week… travelling to see family/friends for the Thanksgiving holiday. The sense is that we have clearly made headway on therapeutics and with a vaccine closer than not – Americans are choosing to make the trek… Now, you can say what you want- but the message is clear – many Americans are tired of being held down no matter that infection rates surge. We know what to do, we know how to protect ourselves, we know what the risks are – People interviewed at different airports across the country said the same thing… ‘I understand the risks, my family understands the risks and we will do the best we can to mitigate the risks…’ Many hosts are requiring that anyone coming to their house must get tested before they come, mimicking gov’t requirements for travel, for hospitalizations for business continuity… I mean, many of the big investment banks are calling employees back to work and providing weekly (Monday morning) rapid tests to try and maintain control. Welcome to the new world… and while stocks were under a bit of pressure on Friday – it was by no means a disaster… by the end of the day, the Dow lost 220 pts, the S&P was 25 pts lower, the Nasdaq lower by 50 pts and the Russell UP 1 pt.  

In addition to the Treasury/FED drama, we continue to have the political drama… as various courts around the country deny the Trump Administration’s efforts to flip the election… and that story is now becoming old and in fact – the efforts/antics by the GOP have the ability to cause real damage to the party (if it hasn’t already) and to the upcoming Georgia Senate race… the results of which could upend what the executive branch could look like on January 6th, 2021. And THAT is the short-term political risk for the markets… What happens in Georgia will shape the Senate for at least the next two years… and my sense is that the markets are not fully appreciating that yet – news reports this morning suggest that this race is HEATING UP, money is flowing into the state as both sides fight for those two seats… So while investors are keenly focused on the virus and the vaccine talk – which are important for sure, markets could be upended temporarily as we approach that runoff date. Just sayin…

Over the weekend - Joey taking to the media making sure that Americans know that the Trump organization is doing nothing to be helpful in this transition, Trump skips a G20 meeting in a ‘flip you the bird’ move and decides to go golfing instead, while former NJ Governor  Chris Christie stands up to say that the Trump legal team is a ‘national embarrassment’ serving to do nothing other than entertaining  the masses… Remember the name – Sydney Powell – there is sure to a Netflix Original series about this woman sometime in the near future.   Over the weekend – it was much the same… Political drama and vaccine drama – Good news from AstraZeneca about their ‘late-stage trial’ – suggesting a 90% efficacy rate as well as the fact that you can store this vaccine in your fridge are helping markets to surge this morning. News that Regeneron did get EMA (Emergency Use Authorization) approval from the FDA for their cocktail of drugs is just another sub-plot and Dr Slaoui – Chief Scientific Advisor for Operation Warp Speed taking to all the Sunday news programs telling Americans that we COULD start receiving a vaccine by the second week of December. It is another ‘Monday Morning Vaccine Trade’…

Now back to the ‘shelter in place’ conversation… while Dr. Fauci is telling us to stay indoors on Thursday – he is not saying anything about staying indoors on Black Friday! In fact – I have not heard anyone tell us to stay home once the official shopping season kicks off… and that is exactly when we should be staying home… Why? Because family is family – dinner around the Thanksgiving table seems a lot LESS dangerous than shopping with strangers in a mad dash to ‘get a deal’. I mean if anything is gonna cause Christmas funerals – it’s NOT Thanksgiving dinner…

OK – let’s be clear… Black Friday or Small Business Saturday or Cyber Monday – per se – don’t really exist any longer – no matter what they say – the retail industry has transformed the whole shebang into a whole quarter event… I mean – especially this year… with covid and everything… retailers have been throwing sales, slashing prices one day and then slashing them again the next in what has become a race to see who can outsell who… and while the Black Friday ads are heating up – are we really thinking that we are about to see the ‘mania’ of years past? I mean do you recall how people would line up at soon after the Turkey was served to be the ‘first one in the store’ at midnight? I never understood that at all and nor did I EVER participate in it… It was a retail gimmick; it was all smoke and mirrors… but they had the country ‘trained’. The buildup, the excitement, the tease… it was all a gimmick… but the funny thing is – it worked!    

Somehow, this year that doesn’t seem possible… I mean, have you paid attention to the news? Do you realize how many people are still out of work? How many people are hurting because the country is now in some state of lockdown, small businesses are shuttered, people in food lines around the country, whole cities fell asleep again… Chicago, in a 30 day lockdown, LA, San Fran, NYC, Boston, Miami, and the list goes on… and Congress has FAILED to act on another round of stimulus… But, I am sure to be surprised… And why would you go ‘shopping’ at a mall – when virus cases are exploding (and the mask does not completely protect you, no matter what they say)  – when you can sit at home, in your jammies and just go ‘shopping’ online… I mean – you know that online sales are gonna blow away the traditional in store sales… we have seen it. Estimates are suggesting that online holiday shopping will increase by 40% this year… and that will prove to be an issue for FDX, UPS, DHL and the USPS… just think about all of those boxes that need to be delivered before December 25th. Think about all the online sales that AMZN, WMT, M, TGT, etc. are about to make… You’d be crazy to think that Jeffrey or any other well positioned retailing CEO isn’t gonna report BLOW OUT numbers in January… So, if you can’t go to your mother’s house for Thanksgiving – HOW can you justify going shopping in a crowded store, risking infection as strangers breathe all over you, pushing and shoving when you can sit at home, have a cup of coffee, turn on your computer, and shop your heart out (if that is what you really want to do...)

Global markets are in rally mode again – (See above)… US futures are UP. Dow +150 pts, the S&P’s are +15, the Nasdaq is +33 pts and the Russell is +12 pts. Investors are looking through the near term possible volatility and focusing once again on the longer term prospects of a recovering world. The US political drama for the White House now fading as the majority of the country and the world now recognize that Joey is the next President… and the ‘viral’ news about 3 or even 4 possible vaccines creates a Risk On mood. Oil continues to surge and is up 1% at $42.85/barrel – bringing its surge to more than 20% since November 1st.  

In Asia – Japan was closed for a holiday, but Hong Kong was up 0.13%, China +1.25% and the ASX +0.34%.

In Europe – markets are also rising… Europeans celebrating the British Pharma giant AstraZeneca… IHS/Markit Flash PMI for the Eurozone reported that purchasing managers activity came in at 45.1 – the lowest in 6 months and well below the 50 rate that defines contraction vs. expansion. French PMI was a disaster – coming in at 39.9 down from 47.5 while German PMI was 52 down from 55.  At 7:15 am… the  FTSE +0.05%, CAC 40 +0.46%, DAX +0.56%, EUROSTOXX +0.41%, SPAIN +0.50% and ITALY +0.63%.

Eco data today includes: Chicago Fed Survey of 0.27, Markit US Manf PMI of 53 and Markit US Services PMI of 55. – Both very strong numbers…

Oil is up 42 cts at $42.84/barrel… remaining above all trendlines as it attempts to test the August highs of $44.45/barrel. A vaccine is coming and OPEC will control production if they need to… but with a recovering economy – demand will surge… and while there is enough supply – oil will rally a bit more… I continue to believe that we will remain in the $40/$50 range as the chart continues to fill the gap created on March 9th. (that is a positive!)  

The S&P closed at 3557 – down 25 pts… On Friday I said that I thought we would find support at the 3550 level… we found it at 3556… a level we have tested now 3 times in the past week… (that is positive) so if the tone holds today then a test of 3600 is not out of the question… (it’s a 1.5% move from here). Thanksgiving week is usually a good week for stocks… much of what will happen will happen by Wednesday… Remember Friday is a half day.

Take good care.  

Kp

Nana's Cheesecake

A holiday staple… This is my favorite cheesecake recipe… and we make this for all of the holidays – it’s always a crowd pleaser and so easy to make. This recipe once again reminds me of my Grandmother – It will bring a smile to your face and will quickly become a staple on your desert table along with the Italian pastries – cannoli’s, Profiteroles, sfogliatella, parigini, pasticiotto… (the Christmas version has a twist which was introduced to me by a reader! It is out of this world – but you’ll have to wait until Christmas for that recipe) Preheat oven to 375 degrees. Crust - 1 1/4 cup flour, 1 1/4 tsp of baking powder, 1/4 c sugar, 1 stick of melted butter, 1 beaten egg, 1 tsp vanilla. Put all ingredients into a deep-dish pie plate and mix directly with a fork.  Once formed - using the back of a tablespoon - gently spread it out into the plate and up the edges. Filling:16 oz of cream cheese, 2 beaten eggs, 1 c sugar, 1 tblspn flour, 1 1/4 c whole milk, 1 tsp vanilla

Combine all ingredients into a blender and mix well.  Now pour the mixture directly into the crust - sprinkle with cinnamon and place in the middle rack in oven.  Bake for 35 mins...Remove - it will appear shaky... no need to worry... as it cools it becomes solid and creamy. Refrigerate and when ready serve – you can serve it just plain or with any fruit topping you like.   Buon Appetito.

[kennypolcari]

Rotation, Rotation, Rotation – Try the Lasagna

****I was pleased to appear on the Investor’s Business Daily podcast yesterday… here is the link – as expected I ran out of time – so I fully expect to be invited back to finish the story!  I hope you enjoy.

To watch, click here.  

Rotation, rotation, rotation… stocks opened weaker, traded lower, and then in the late afternoon went flat and then surged into the closing bell… the early morning concerns about ‘you know what’ appeared to soften in the afternoon after PFE revealed that will submit an application to the FDA for EMU (Emergency Use Authorization) for their vaccine today (not that that is new news, but it is the certainty of the fact vs. the speculation of the fact) AND that Senate Majority Leader Mitchy McConnell has agreed to restart stimulus talks with Nancy & Chucky. And both of these events were enough to lift the cloud of despair but remember – while they agreed to restart the talks, there is NO guarantee that they will get anywhere – so again markets are moving on the hope of a deal and NOT on a deal… Capisce? By the end of the day the Dow added 45 pts, the S&P’s were up 15 pts, the Nasdaq gained 103 pts and the Russell rose 15 pts.  

Energy (XLE) which had been leading for the past week before it got whacked on Tuesday and Wednesday – took the lead again – rising 1.6%. Financials (XLF) which had also come under pressure during the past two days found support as well rising 0.33%. Existing Home Sales, which rose much better than expected, helped HD (+0.45%) and Basic Materials (XLB) rise 0.43%. The Bloomberg Consumer Comfort Index rose and that apparently is making consumers feel all warm and cozy, running out to buy all new stuff for their new homes – sending the Retailing ETF (XRT) surging by 2.3% (or maybe it’s a lot of holiday shopping going on). All other sectors responded as expected and ended in the green… Utilities (XLU) backed off 1% which makes sense IF the tone changes. And the VIX – which had shot higher in the morning (helping to send stocks lower) turned lower (helping to send stocks higher) at the same time that the PFE and stimulus talk news hit the tape and that also makes sense… Less fear = a move into stocks… More fear = a move out of stocks – it’s a simple concept.

Look – stocks have been antsy for weeks now and will remain so in the weeks ahead as investors/portfolio managers/traders and algo’s weigh in on all of the issues we have been discussing. Optimism about a vaccine clearly being the driver higher of late, while surging infections, hospitalizations, new restrictions and lockdowns are being the driver lower of late. The market is left to figure out which way the pendulum will swing first… will it go left and focus on the negatives or will it go right and focus on the positives while a range of states begin to impose even stricter rules? I mean CA now imposing a limited ‘stay at home’ order beginning on Saturday joins other states (IL, TX, NJ, WI, MI etc) that are doing the same. NYC is about to shutter the whole place again while many other cities impose 10 pm – 5 am curfews. Airlines are once again seeing a DROP in bookings – after what was expected to be a surge – ahead of the holiday as ‘red’ zones appear all around the country. The CDC (Center for Disease Control) also urging Americans to STAY HOME this year for the holidays as hospitals and the healthcare system becomes overwhelmed.

Now, While there is plenty of money on the sidelines that is ‘aching’ to be put to work – many investors are playing the wait and see game… as any headline right now has the ability to send the markets careening or soaring… and the bet is the path of least resistance right now is lower… which some seem to think is exactly why the markets will go higher….because everyone expects it to go lower… In fact – that can be seen in the move right after the election – all the talk of a Biden win was supposed to cause a re-pricing in the markets – and it did not…..and I credit that to the fact that the election is not over yet…..and I am not talking about the WH – that is clear…I am talking about the Senate and that is not clear (yet).  It could go in either direction and you can bet that both sides are fighting hard for the win.  So, it depends on that outcome… a Dem win will – in my opinion – cause that repricing while a GOP win will most likely cause the markets to rally…. In any event – remember- Politics will NOT price stocks in the long run, they do manage to cause short term chaos, but in the end, the markets are efficient and will adjust to the new administration and the policies/regulations that can be expected if it is a DEM sweep or if it is a divided congress with a GOP win in Georgia.

Right after the bell last night – news hit the tape that Treasury Secretary Stevey Mnuchin and Fed Chair Jay Powell got into a fight – with Stevey declining to extend a couple of the emergency lending programs initiated by the FED allowing the programs to expire on December 31st.  Futures spiked LOWER on that news… but have since calmed down… rallying back a bit but not going positive (yet). Now you can argue it two ways… the first is that Stevey is following the rule of law – in that congress’s intent was to fund it until the end of the year. But you can also argue that Stevey is making it more difficult for the incoming administration. I mean, look – this has been simmering – On Tuesday, the FED made it clear that they didn’t think it would be appropriate to ‘allow the program to expire’ and then on Thursday – the Treasury overrides the FED and says No. Now, this decision does risk unsettling the markets and it looked like that was happening last night – as it weakens (or appears to weaken) a key source of funding during times of stress. But many analysts have come out since this news hit the tape to try and calm investor fears that this is not what it appears. Ok – let’s see what happens if the markets begin to throw a temper tantrum.

US futures are mixed at 6:30 am… Dow futures point lower by 70 pts, the S&P’s down 4 pts, the Nasdaq is 10 pts while the Russell is off 2 pts. Today’s focus will now turn to the fight between Mnuchin and Powell… analysts from both sides will argue their point and it will up to investors/traders/and algo’s to figure out who is right. Clearly the Nasdaq – which is higher is suggesting that this is a non-event and that it is nothing to worry about… the Dow and the S&P which had been significantly lower overnight have also regained most of their losses – also suggesting that this is not what it seems….the market is telling you its more drama. In addition, there is new news on Gilead’s Remdesivir… and it’s a negative not a positive. Apparently the WHO (World Health Org) is rejecting use of this drug and that is causing some conversation in the scientific community… But I don’t expect this news to be a market negative at all, it will affect GILD, but considering the PFE and Moderna news – this Gilead news is not a game changer, never mind that many scientists are debunking the WHO thesis anyway.

The BREAKING NEWS in PFE this morning – which is nothing more than the clarification that they DID submit the application to the FDA is now being talked about….but it comes across the screen with a bit RED banner – with BREAKING NEWS written in all caps… as if this is really BREAKING NEWS… it isn’t… but it is a way to try and divert the conversation from the negative Treasury/FED story onto a positive covid/vaccine story.

European markets are all higher by about 0.5% across the board. Europeans are not paying much attention to the Stevey/Jay drama but would rather talk about the potential new stimulus talks between the GOP/DEMS. In person BREXIT talks have been suspended after the covid 19 virus spread across a team of negotiators, but both sides are trying to do this remotely in the hopes of coming to a deal by the end of the month.  At 7 am - - the FTSE +0.5%, CAC 40 +0.52%, DAX +0.56%, EUROSTOXX +0.57%, SPAIN +0.67% and ITALY +0.84%.

Eco data today includes: Nothing.

Oil is up 26 cts at $42/barrel… remaining above all trendlines. The idea that a vaccine is coming and that OPEC will control production is the story. Concerns over lockdowns and restrictions while a concern are not causing markets to convulse. We remain in the $40/$50 range wth $45 being the next level of resistance.

The S&P closed at 3581 up $14 pts… Yesterday I thought that we would find support at the 3550 level… we found it at 3543… Ok – so I missed it by 7 pts… If the tone holds for the day… I suspect that 3550 holds and that 3600 will be resistance. There is no other data today other than the FED story and the Stimulus story… It is Friday, the weekend is here and next week will be interesting as it is Thanksgiving week – a time when the country is usually on the move… this year – not so much… so let’s see what happens next.

Take good care.  Have a great weekend.

Kp

Lasagna

A first course for Thanksgiving…

Now – If you grew up in an Italian family – you know that you always serve Lasagna on thanksgiving… So here we go.

For this you need – the ‘oven ready’ Barilla lasagna sheets – so easy to work with and you don’t have to make a mess and boil them first etc. Fresh Ricotta, shredded mozz and Fresh Grated Pecorino Romano, the classic meat sauce and the meatballs.

Begin by removing 6 meatballs from the sauce - and put them in a large bowl.  Now with a fork - smash the meatballs, Add in 3 spoonfuls of fresh made ricotta cheese, a ladle of tomato sauce and a handful of shredded mozz. Mix well.  

Next in a glass Pyrex rectangular dish - put some sauce on the bottom of the dish - now line up the lasagna sheets all in one direction - say lengthwise.  Now put a layer of the meat on top of the lasagna sheets - add some sauce (do not drown) and then in the opposite direction make another layer of lasagna sheets - This way you build the lasagna.  Repeat with the meat and sauce and then add another layer of lasagna sheets in the original direction - repeat with the meat and sauce - capisce?    

(Now you will need to smash more meatballs and add the ricotta and mozz  as you go along - so you have to make sure you have enough meatballs.  You need at least 2 lbs of meat to have enough meatballs to smash and use.)  

For the final layer (4 layers are usually enough): Lay the sheets in the opposite direction of the layer below.  Now top with some tomato sauce and shredded mozz.  Here you can also sprinkle some fresh grated pecorino Romano.   Cover with tin foil and place in the oven to bake at 375 degrees for 25 mins.  Remove the tin foil and bake for another 5 - 8 mins just so it browns a bit.  Remove and let sit for 10 mins before cutting and serving.

[kennypolcari]

New Lockdowns and Restrictions Cause Angst as Infection Rates Surge – Try the Linguine Carbonara w/Peas

It is all about the virus, infections, lockdowns & politics… Period, the end. The Macro data points doing nothing to drive investor sentiment or market action. While that is exhausting – it is what it is (at the moment…)

Ok, sports fans – buckle up… markets tumbled yesterday… picking up speed as morning turned to afternoon… Investors/traders and algo’s clearly focusing on the surging virus –the most recent move driven by an array of new restrictions, lockdowns, school closings (NYC schools– the largest system in the country has gone dark) and concerns about what will happen when all of these college students return home for Thanksgiving, never mind the families that plan on travelling… who will they see, what will they do? And to add insult to injury have our elected officials on both sides of the aisle even noticed what is happening in the country?  

In Texas alone thousands of people sitting in cars for hours in lines that go on for miles wait for food. On Saturday alone, the North Texas Food Bank (NTFB) handed out more than 600k pounds of food for more than 25k people. Never mind all of the small businesses that have shuttered and are about to close down. And the latest headlines coming from our friends at Goldman – inform us that a second round of job cuts at their firm is only days away as the moratorium on firings during the pandemic is about to end as they look to ‘improve efficiency’ … All this while they tell us that the economy is improving and that it will come back stronger than ever… What am I missing? By the end of the day the Dow lost 345 pts, the S&P gave back 42 pts, the Nasdaq lost 98 pts and the Russell (which has been an outperformer) fell by 23 pts.  

Now, while both PFE and Moderna are giving us hope – they are both still weeks if not months away from the first doses… and while investors celebrated the vaccine news – the most recent data about infections, hospitalizations and deaths was top of mind yesterday. Newly diagnosed infections growing exponentially and hospitals in parts of the country once again overwhelmed. It is these data points that continue to drive market psyche at the moment… so while it is putting pressure on stocks – it is creating opportunity in the markets for the long term investor.  

Now, estimates range from 15 mil to 30 mil initial doses of the vaccine – and then someone has to decide who is in line to be the first. Cleary, front line workers and older Americans would be first in line – followed by Americans at risk then followed by the rest of us… so, the whole country is not getting vaccinated anytime soon and there is still the issue about who doesn’t want to be vaccinated… Recent polls suggest ~55% of the respondents will take the vaccine, while ~45% have no interest in being the first ones in line… Dr. Fauci – reminding us that we need at least 75% of the country to sign on if we really want to crush it.  

The Trump administration is curiously silent about the latest developments around the virus while they are quite vocal about the election and that is causing a different level of angst. Toss in the refusal to allow a smooth transition and you have another issue that is causing some concern. Now while most GOP legislators confirm that while Trump has the right to challenge any state on their vote count, if it turns out to be what the country and the world have already acknowledged, then they assure us that it will be a ‘smooth’ transition. The problem right now is that the ‘smoothness’ part – should have already been happening – and Joey has made it clear that with each passing day that he does not have access to the process – the country can expect continued stress. There has been NO movement on a new stimulus plan (they don’t even discuss it anymore) and with the surging rates around the country causing a range of new restrictions – the immediate future is not bright – no matter that stocks were pricing in green shoots 6 months out.  

And then we still have the Georgia Senate race uncertainty issue looming and the fight is on… Stacey Abrams and Lebron James going long on ‘getting out the vote’ across the state, while Kelly Loeffler and David Purdue defend their seats… Money is pouring into the state as each side battles and that race isn’t over until January 6th – it is only then that the country will know what’s next. So that is just another pot on the stove that is simmering on the back burner ready to boil over…

As stocks came under pressure, the VIX – which had sold off over the past couple of weeks on the idea that the sun is about to shine – is starting to rear its head again… And while it is not ringing alarm bells right now, we know how quickly that change. $26/$27 is the level to keep your eyes on – a move up and thru this level could surely see a spike in the VIX which will put pressure on stocks… so sit tight – the VIX is up 9 cts at $23.92… but the next move could be swift.  

Overnight we got more good news about another vaccine… this one from the AstraZeneca/Oxford study… the headlines say it all…

“Oxford Covid Vaccine Trials Indicate it is Safe, Produces Robust Immune Response Among Older Adults”

Now to be fair – this is only a phase 2 trial, and it only has 560 participants, 240 over the age of 70 – Phase 2 has found that it is safe and has produced a similar immune response in all participants ranging in age from 18 -70. Now, it did not assess vaccine efficacy – that is what the phase 3 trial does. So, while this is good news, it is incomplete – and is not really changing the tone in today’s markets

US futures are down again today… the Dow is down 100 pts, the S&P is off 9 pts, the Nasdaq is lower by 38 pts and the Russell is down 6 pts.  It does appear that we’ve hit a bit of an air pocket – but that shouldn’t surprise anyone… the move up in the past 3 weeks post the election was dramatic and not in most people’s play book – the good news about a vaccine overshadowing the short-term immediate concerns. But yesterday and today at least those short term concerns are front and center… And like we have been discussing – you should expect volatility – there is a lot going on and until we get more clarity on the range of all these issues – you shouldn’t expect it to stop. Now remember – the markets are very good at pricing in both good and bad news… but it has trouble pricing in mixed news – because it can go from positive to negative in the blink of an eye and that is why you can feel the angst persist.

Eco data today includes Initial Jobless Claims of 700k – which would be good, if it continues to trend lower, but in reality that is hard to see how that could happen considering what we all know, but let’s see. Continuing claims of 6.4 mil would also be a big improvement over last week’s read of 6.7 mil. Existing Home Sales expected to be down 1.1% which flies in the face of the most recent housing data, but what people want is NEW homes, modern designed homes, homes with offices, media rooms, gyms and outdoor space… they seem to be shying away from ‘existing home’… but let’s see. In any event – I do not expect any of the macro data today to influence the mood.

European markets are down… paying no attention to the AstraZeneca news or even the PFE or Moderna news… investors are keenly focused on lockdowns, restrictions and fears of even more to come. This morning ECB President Christine Lagarde telling us that Eurozone inflation is likely ‘to remain negative’ into the first half of 2021 as newly imposed lockdowns, restrictions wash across the continent. She also noted that unless the EU (European Union) comes up with a new stimulus plan the damage to the zone could be even bigger than current estimates. At 7 am - - the FTSE -0.80%, CAC 40 -0.73%, DAX -0.56%, EUROSTOXX -0.83%, SPAIN -0.67% and ITALY -0.22%.

Oil has halted its surge – at least for today… and by now you know why… Traders are taking the opportunity to ring the cash register after oils recent surge… WTI is up 20% since the 1st of November – much of that driven by the excitement of the vaccines and how the world was about to re-open – has now given way to heightened concerns about the toll all of these new lockdowns will take on the global economy. It has surged up and thru all 3 trendlines and is now testing support at $40.95. Sit tight… More to come

The S&P closed at 3567 down 42 pts… closing right on the lows of the day… as did the other indexes – and just so you know – that is usually not a positive sign for what may happen today… When the indexes close on the lows, it typically causes the next day to come under more pressure and we are seeing that in early pre-mkt trading… Unless there is some significantly positive news surrounding the virus, infections, lockdowns, or a smooth transition – I don’t see any reason for stocks to run away… It looks like near term support is right here at the 3550 level… and we will test that early on today unless something positive happens in the next 2 hours. If that doesn’t hold then a move to 3500 would not be a surprise. Like I said – I still think we should see some pullback and consolidation in the markets as we move into mid-December… and then early January. Sit tight and stick to the plan. Call me to discuss.

Take good care.  

Kp

Linguine Carbonara with Peas

So this is the usual carbonara dish – with peas. Had it last night for dinner and thought you might enjoy. (Had to teach my younger brother…)  

For this you need: 1 lb of linguine, a package of thick cut bacon (diced), bag of frozen peas, 3 eggs, fresh grated Parmegiana Cheese, one lg clove of garlic, pepper and more cheese!

Bring a pot of salted water to a rolling boil…

Beat the 3 eggs and add a handful of the cheese to the eggs directly – mix well.

While this is happening – place the diced bacon into a frying pan – no oil, no nothing. Turn up the heat. Now take your garlic clove – press it gently with the back of a knife just enough to ‘crack it open’ Do not smash it. Place in the pan with the bacon and stir.  

Cook the bacon on HIGH for 5 – 8 mins… Now add the frozen peas – turn the heat to med… allowing the peas to defrost and cook – you want to keep them a bit crunchy – not mushy. Season with a bit of s&p.

Now add the pasta to the pot of water and cook for 8 mins or so… you want it aldente.

Discard the garlic. Turn off the heat. Add about ¼ of a ladle of the pasta water to the bacon and peas…

Now add the aldente spaghetti to the sauté pan. Mix well… Add the egg/cheese mixture. Toss immediately mixing the eggs with the HOT pasta. Mmmmm. If it appears to get dry – add in a bit more of the pasta water (the goal is to allow the cheese to become a bit creamy – if you need to add more to the pan – feel free!) Serve immediately with a glass of chilled white wine. Always have more cheese on the table for your guests.

Outstanding!

[kennypolcari]

It’s Good, It’s Bad, It’s Good Again; AMZN Goes on a Search & Destroy Mission – Try the Medium Shells

Stocks took a breather on Tuesday after the explosive move on Monday… which should not surprise anyone… and if it does – then let’s chat about that… but my guess is I don’t think we need to. Yesterday the focus moved from the Moderna vaccine and all of that good news… to once again the explosion in virus cases, new lockdown measures, weaker retail sales, continued political uncertainty, more election drama, policy confusion, FED/monetary confusion, weaker dollar and soaring Bitcoin, perceived negative news for HD (after their earnings blew the roof off the house) and pressure on pharma after the AMZN news that they have now launched their online pharmacy… something that everyone knew was coming – and it caused a big negative reaction in the space – CVS lost 8%, WBA -9.6%, and RAD -16%... The thinking here is – search and destroy – which is the Amazon mantra… ‘search and destroy’… and so it goes – some of the best names in the space got whacked… by the end of the day – the Dow lost 167 pts, the S&P’s gave back 18 pts, the Nasdaq gave up 25 pts and the Small Caps/Mid Cap Russell bucked the trend and gained 7 pts as the move into the small cap space finds no reason to slow…

So let’s just chat for a moment about HD… they reported earnings of $3.18/sh vs. the expected $3.06/sh, they reported revenues of $33.54 bil vs. the expected $32.04 bil, and if that is not enough – the top and bottom lines grew 23% & 24% respectively… and they put up a 24% same store sales growth… BUT they also reported that the ‘temporary employee renumeration programs’ would now become permanent wage increases – adding $1 bil of additional expenses – which the bean counters didn’t like… but I don’t see as a negative actually – I would view that as doing the right thing, thus investors should reward them for that and not punish them for that… but that’s the human side of my analysis, not the math side… capisce? But the real kick in the gut is the fact that Moderna and PFE/BioNTech may succeed in saving the world – which means that explosive growth that they reported won’t continue once everyone is allowed to go back outside and live and so the stock took it on the chin… falling 2.5%. The stock has now fallen below 2 trendlines as the re-opening trade continues – so technically it may continue to come under pressure – but it should find support at the $270 level… unless of course the total tone in the markets changes (which it could over the next month) – so don’t chase it – be patient.  

And then the pharma names? Really? These names got smashed yesterday… after Amazon launched its online pharmacy – something that everyone knew was coming… OK – so now they offer ‘online pharma’ – that is not a new idea… CVS, WBA and RAD do that already. In fact, I use CVS and hardly ever go to the pharmacy there, because I can order, re-fill and have delivered any medications that I need. They accept my insurance, they know me, they reach out to me and remind me that I may need a refill (just in case I’m not paying attention) – so why the violent reaction? Well, it’s simple – the fear is that Amazon will succeed in their ‘search and destroy’ mission and that CVS, WBA and RAD will go the way of the bookstore, the grocery store or the toy store… I for one – will NOT use the AMZN pharmacy for the same reason I won’t go food shopping via AMZN – why?  Simple – I like my local CVS, I like my local grocery store because I like to cook so I like to go to the store and ‘see’ what I’m buying. I like to GO OUT, I like to breathe fresh air, I like to see people, I like to live Second – AMZN requires that you fill out a ‘profile’ so that they know even MORE about who you are, what illnesses you have, what meds you take etc… Now that does not mean I don’t use AMZN – I just don’t use it for every single thing in my life. Everything in moderation.

And this morning… US futures are higher – apparently ignoring all of the issues that they focused on yesterday – Dow up 70 pts, the S&P’s up 8 pts, the Nasdaq up 32 pts and the Russell up 8 pts. – which speaks to the confusion that investors are dealing with… When I turned on the news this morning… all I heard was every adjective under the sun that creates hysteria to explain the latest covid19 news overnight… Aggressive, threatening, attacking, invading, exploding, erupting, blowing up and the list goes on – Headlines that fuel the angst make the front pages… and calls for reimposing restrictions are building after more than 1 million more cases are reported…

“New Lockdowns and Restrictions Sweep Across the Country as Covid19 Cases Continue to Rise”

Senate Pro-tempore – 85 yr old Chuck Grassley is the latest legislator to contract Covid – but he assures us that he is following Dr’s. orders and feels fine… He is not presenting any symptoms… but markets are not paying attention to any of this hysteria this morning… PFE is now reporting that their vaccine is 95% effective and that they too are ready to submit to the FDA for EUA (Emergency Use Approval) … and that is causing PFE to surge by another 2.5% in pre-mkt trading helping futures to focus on the vaccine once again…

Target – just reported earnings…and guess what? Yup – Blew the wheels off the bus… Earnings of $2.79 vs. the exp of $1.60, Revenues up 21%, Same store sales up 10%, Digital sales up 150%, blah, blah, blah… and the stock is doing what? Up $3 or 2.1% in pre-mkt trading… and Lowes misses on EPS (by 1 ct) but beats on revenues… that stock like HD yesterday is getting slammed – down $6 or 10% in early trading… the theme? A vaccine – if successful – will hurt them in 2021. Oh boy…

And Bitcoin – that has soared (quietly for the most part – until now…) It is up 300% since the March lows… going from $4k/coin to $18,200/coin today… Once again – it is in the news… everyone under the sun now becoming a Bitcoin expert trader… Look – it is the perfect storm, the virus, the lockdown, the massive printing of fiat currencies, weakening dollar, massive debt etc… all contributing to the drama. It is an asset class at the moment and not a currency, and depending on who you are, it should have some place in your portfolio… not huge necessarily, but something to get your toes wet… study it, learn more, because it is not going away anytime soon… if anything it will take on more significance as the world begins to really adopt it and that feels like what is happening… 2 or 3% of your portfolio is not gonna be enough to blow you up but it is enough to tickle you.  

And as expected – as Bitcoin surges the dollar declines… It is now down 10% from the March highs… breaking all trendline supports… but it feels like it is trying to bottom out here… and find support at 92 level – a price not seen since April 2018.  

Eco data today includes Mortgage Apps, Housing Starts – exp of +3.2%, Building Permits +1.4%. None of which will drive the action at all…

European markets are up this morning as the focus goes from worried to excited. There were no eco data points to drive the action so investors will go from the virus to the vaccine, to the politics, to policy and more stimulus. At 7 am - the FTSE +0.33%, CAC 40 +0.55%, DAX +0.43%, EUROSTOXX +0.47%, SPAIN +0.60% and ITALY+0.72%.

Oil continues to surge… up another 80 cts to $42.19/barrel on hopes of a virus and on hopes that OPEC and its allies will delay any production increases… the Saudi’s calling all members of OPEC plus the Russian’s appealing to them to ‘be flexible’ and this is causing the trader types to go Risk On… As discussed here before -we are now in the $40/$50 range expecting to find some resistance at $45.  

The S&P closed at 3609 down 18 pts… Today’s action could test the Monday high of 3645 if the news concentrates on the positives causing the algo’s to go into buy mode… Look – you know how I feel… I think we are a bit stretched; I think there is some volatility on the horizon so no need to chase anything… If you’re invested, then you’re participating – so don’t worry… and if you are just starting – get going… do not chase but you have to start somewhere – in any event – keep some cash available in case of a selloff… I still think we should see some pullback and consolidation in the markets as it prepares for the next event… which in this case will be the finality of the election and the makeup of the Senate. Sit tight and stick to the plan.  

Take good care.  

Kp

Medium Shells w/ Sweet Sausage, Pancetta and Cannelloni Beans

This is a great dish for a cold night… Light the fire, curl up on the couch...

For this you need: 2 cans of cannelloni beans, garlic, thick-cut pancetta, cut into small cubes, sweet Italian sausage, removed from casing, large sliced onion, olive oil, vegetable broth (I like to use chicken broth), water, s&p, finely chopped parsley, fresh grated Parmegiana, and a box of medium shells.

In a saucepan over med hi heat – add some olive oil and the sliced garlic – sauté for 3 or 4 mins… now add the sliced onions and sauté until soft and translucent – careful not  to burn the onion… When ready… add in the pancetta and sausage and allow to brown up nicely. Using your wooden spoon – break up the sausage as it cooks.  

Now add in the 2 cans of Cannelloni beans – juice and all and mix, allowing the beans to marry the other ingredients. Next add the broth and the water at a 2:1 ratio… (2 c broth, 1 c water or 4 c broth, 2 c water… see the pattern?). Let this simmer on the stove for 15 mins… stirring occasionally. Now bring it to a boil (adding more water if you need to remembering that the pasta grows and sucks up the liquid) – toss in the shells  - you don't need a whole pound here... the pasta grows and sucks up the broth - so maybe like a half pound depending on how much you are making and cook until al dente – maybe 8 mins or so – adjust for taste and serve in warmed bowls – adorn with the parsley and if you like a drizzle of olive oil. Have plenty of fresh grated parmegiana cheese on the table for your guests.

You can serve this with toasted garlic bread – traditional “Pane di Casa” is the perfect texture

Buon Appetito.