Things you need to know
– Mkts churned – Nothing dramatic driving the action
– UK’s BoJo – dealt a blow over BREXIT
– Saudi Oil production back on line.
So stocks meandered all day…..teasing below the flat line all morning only to move higher and trade in positive territory all afternoon before giving it all up in the last 15 mins to end the day flat. In the end it was a non-event. By the end of the day the Dow was up 15 pts, the S&P was off by 0.29 pt, the Nasdaq fell by 5 pts and the Russell gave up 1 pt.
The tone was set in Europe as all the mkts were under pressure as a host of macro data points coming out of Germany and the zone suggested that times are still tough across the continent. But you would never know it by looking at ytd returns for those mkts…UK is up 9%, .France is up 20%, Germany up 17%, Eurostoxx (representing the Eurozone) is up 18%, Spain up 7%, and Italy is up 20%.
But, by now – aren’t we all just expecting more negative news out of Europe? I mean it is all we’ve heard for a decade even as the ECB has slashed rates and bought bonds – and they still can’t get out of their own way (Hello – anyone paying attention?) …..yet – the mkts march higher……so while the negative rates and bond purchase program hasn’t done much to stop the bleed and stabilize the economy – you would never know it by the stock returns.
So yesterday’s news about weaker sentiment and weaker PMI’s in Europe and in Germany did cast a negative pall over the mkts to start the day……highlighting the fact that the global economy is slowing…but then we reported stronger than expected manufacturing PMI and composite PMI and that helped to turn the mkt from negative to positive. So while it looks like a global slowdown is coming it is not expected to become a US recession in the near term.
More talk of US/China trade is always simmering on the back burner but did little to affect mkt direction yesterday. In fact – the only topics that appeared to be on the radar were the WE Work IPO (or not), the Elon Musk like behavior that Adam Neumann (We Work CEO) is now displaying and the Elizabeth Warren marriage penalty tax that will apparently have all of these multimillionaires file for divorce to save $1 mil….Hmmm?
This morning – mkts around the globe are all modestly higher as investors weigh the idea that the trade talks scheduled for next month will produce ‘something’ against the weaker global data points that continue to pummel us from day to day. Lower rates across the globe have done little to prevent what so many think is a coming recession – and so the weakness across the globe solidified what so many now assume is happening next month here at home. The FED is going to cut rates again….
And as expected, our friend St Louis’s Fed President Jimmy Bullard, who is apparently vying to be the next FED chair told us that the FED
“may need to ease monetary policy further to offset downside risks from trade conflicts and too-low inflation”.
STOP!…..our rates are historically low – any other cuts is only pushing on a string – and we know what that does – nothing – just look at what has happened (or not) across Europe. Look – it took the world a decade to get us into this mess – the exit will be just as long – trying to extend this rally with zero interest rates is only going to make the exit that much more difficult…….and if the FED continues to pacify the mkts and the President with lower rates – the exit – when it comes – will be ugly.
European mkts are all a bit higher – excitement over trade and the German IFO Business Sentiment index setting the tone. Now, this survey was weak, but it was slightly better than expected….but it is inline with the most recent data…..Next up – the UK Supreme Court hit PM BoJo – right between the eyes – telling him that his suspension of Parliament was unlawful and therefore Null and Void – calling on all lawmakers to decide now – what to do next concerning BREXIT. Remember that October 31st was a hard date – but also remember that we discussed how they will ‘kick that can down the road’ as we get closer to that date. The Parliament is not going to allow BoJo to pull a ‘NO DEAL’ BREXIT – so it will be back to the table. FTSE -0.20%, CAC 40 + 0.20%, DAX + 0.21%, EUROSTOXX + 0.16%, SPAIN +0.4% and ITALY +0.27%.
US Futs are pointing higher – but not huge – Dow +108 pts, the S&P + 9, The Nasdaq +38 and The Russell is up 5. More trade talk and more talk about what appeared to be a disconnect between Trump and Mnuchin yesterday over why the Chinese cancelled their visit last week……It is nothing to write home about – but the media will make it out to be something more than what it is.
We continue to be in the 2950/3025 range.
Oil – continues to trade a bit lower – currently at $57.92…. – after the recent surge higher due to the Iranian attack on the Saudi oil facilities. The Saudi’s are expected to resume full production by next week – so oil mkts are well ‘oiled’.
Take good care –
This is a simple dish to make and is so rich and delicious.
For this you need: 2 lbs of large cleaned shrimp – (cut in half lengthwise), butter, 1 lb of linguine, ¼ c of Brandy, 1 c of heavy cream, marinara sauce and s&p t taste.
Turn on the oven – Bake 350 degrees.
Bring a pot of salted water to a rolling boil.
Melt a stick of butter in a large bowl – now toss the shrimp – season with s&p. Lay the shrimps out on a baking dish and bake in the oven for 5 – 7 mins….remove and place in a large sauté pan. Over med heat – add in the brandy and allow it to burn off a bit – next add the heavy cream and about 3 or 4 cups of the tomato sauce. Reduce the heat to simmer and allow the sauce to thicken.
Next – add the linguine to the boiling water and cook until aldente – 7 – 8 mins. When the pasta is done – strain (always keeping a mugful of the water) and add directly to the sauté pan and mix well. You can always add back some of the pasta water if it needs it. Serve in warmed bowls.