Things you need to know.
- Stocks churn as investors digest G7 Tax Proposals, Yellen’s rate/inflation comments and ongoing supply chain issues.
- BioGen gets FDA approval for its Alzheimer’s drug – BIIB +34%
- FEDS – take back $2.3 mil of Colonial Pipeline Ransom = 67 bitcoins….
- BTC down 8% – will it test the KEY $30,000 level?
- Try the Stuffed Eggplant
Stocks continued to churn….not really doing much considering all of the news that had taken place over the weekend….the G7 global tax proposal, Yellen’s comments that Joey should push his $4 trillion rescue through even if it spurs inflation and causes rates to rise, ongoing supply chain issues and stretched valuations at a time that could see a change in policy plans at the FED that could happen as soon as next week……
Look – recent comments by some FED officials clearly suggest that a tapering conversation is clearly on the table and while the discussion may take place – we are being assured that any decision is still months away. Again – the expectation of a real decision being months away has been well publicized, so this is not really new information, but what will be is the realization that the discussion has in fact begun, because up until now – they have been very coy on when that may happen.
Cyclicals (XLI, XLF, XLE, XLP) largely on the defensive while reopening plays (XLV, XLK, XRT) meme stocks and biotech (XBI) outperformed. 10 yr. treasuries ended the day yielding 1.54% down from 1.6%. By the end of the day the Dow gave back 126 pts or 0.36%, the S&P lost 4 pts or 0.08%, the Nasdaq though gained 67 pts or 0.5% after news that Biotech company Biogen has gotten FDA approval for their Alzheimer’s drug and the Russell added 33 pts or 1.4%.
Bitcoin was the chatter for much of the day considering the antics that took place in Miami Beach last weekend. All kinds of supporters coming out to express their love for this crypto currency…in fact – I was surprised to see that it was not trading higher after all that excitement – so does that suggest that there is some trouble brewing…are we about to test the neckline (trendline support) at $30,000?
Well late yesterday afternoon – the FEDS (Lisa Monaco Deputy US AG) took to the airwaves to announce that they had recouped $2.3 million dollars (67 Bitcoins) from a ‘virtual wallet’ – that is suspected to be linked to the Russian based criminal gang that held the Colonial Pipeline hostage 3 weeks ago….and while that is good that they recouped that money and they seized those bitcoins….that does bring up another issue (for the bit coiners). Wasn’t this crypto currency supposed to be untraceable? How did the US ‘hack the wallet’? Did they ‘hack the wallet’? Isn’t that the whole issue? Secrecy?
Oh, so many questions…. Well, if what the Feds tell us is true – then the whole secrecy issue gets blown up, right? (And that is not a bad thing, but it does present a marketing problem for the currency bulls…) and that is evident in the overnight action and this morning’s current price. Bitcoin is down ~ 7.5% and is trading at $32,800 – feeling like it is about to test support at $30,000. Recall my comments in last week’s Street.com live event. A failure at $30,000 could see it trade down to $20,000 in a heartbeat….so stay on the edge of your seat…. but do not go to the bathroom…. Capisce?
Next up was all the hoopla surrounding Jeff and his brother (Bezos’s fame) buying a ticket on Blue Origin (Bezos’s space venture) to fly into space for an 11 minute thrill ride…..but don’t worry, there is still room for one more passenger – tickets currently being bid $2.5 million for those 11 minutes…..In any event – while this is all very exciting – CNBC’s Squawk Box tried to tie it to what would happen to Amazon shareholders….as if anything would happen…. I mean – I get it, Jeff Bezos’s, and Amazon, but there is zero connection between him flying into space and Amazon’s next move…. Are you intending on selling your Amazon stock if – by chance – the rocket blows up and the Bezos brothers end up going ‘somewhere else’? And if you are – why? Are you going to change your investment thesis for Amazon if Jeff should suffer a heart attack here on earth and pass on? I mean, that argument makes zero sense, but I suppose it did give Becky and Andy something to opine on. I guess a massive rocket failure would be more a ‘more dramatic’ ending to a spectacular story, but in fact, it would be a very appropriate ending to that spectacular story…. Don’t you think?
And then the MEME stocks continue to draw attention away from the broader issues….and while they are all very exciting and people have made big money (while others have lost big money) – I am still not a believer that current valuations make any sense at all…but I am just one lone voice that chooses to ignore all this noise. But remember – AMC CEO Adam Aaron is going to give you a FREE large popcorn when you go see a movie at an AMC theater – if you prove that you own the stock in your Robin Hood account!
This morning futures were flat but have taken a more bearish tone at 6:30 am. Dow futures down 150 pts, S&P’s down 10 pts, Nasdaq off 2 pts and the Russell is showing down 6 pts. Asian markets mostly lower overnight with China the biggest loser. European markets higher. Treasuries are unchanged, 10-year yields holding below 1.55%. Dollar holding above 90, Gold holding onto $1900 while oil – WTI crude – is off 0.3% trading at $68.60.
Market is once again devoid of major directional drivers as we all await Thursday’s release of May CPI data. Infrastructure talks have stalled, Joey Manchin refusing to take part in the proposed far left agenda and this is sending both Chucky and Nancy into a frenzy – but a bipartisan group of senators may outline an alternative plan. The weekend’s G7 proposed tax ‘agreement’ is just that – proposed…. Multiple reports detail all the stumbling blocks for any real global minimum tax deal. Also, there is continued speculation about how the FED is likely to start tapering discussions next week. WSJ headlines with
“Commodity Price Surges Add to Inflation Fears – Higher prices for commodities are flowing through to more companies and consumers, making it harder for central bankers to ignore them.”
European markets are churning. Eurozone GDP 1st qtr. final read was -0.3% q/q and -1.3% y/y. Household spending down 2.3% q/q. In mid-morning trade we see the FTSE +0.24%, CAC 40 +0.05%, DAX -0.00%, EUROSTOXX +0.10%, SPAIN -0.47% and ITALY -0.21%.
Bitcoin is down 8% at $32,800, Ethereum is down 6% at $2,500 while Doggey Coin is -8% at 0.32 cts.
The S&P closed at 4226 – after trading in a tight range of 4215/4232. I have been saying that the markets feel a bit tired, extended and needs some time to digest what is coming down the pike this month – and I continue to believe it…. Just to be clear – we have been stuck in this 4100/4250 range for 2 months now…. While the trendline channel suggests a range of 4125/4325. CPI and FOMC are the next real drivers….so expect more churn until we make it through both.
Text INVEST to 21000 to get my digital business card – give me a call if you want to discuss the markets or a plan. You can now get a video version of this note on my YouTube Channel.
You can follow me on Twitter – @kennypolcari
Take Good Care
Chief Market Strategist, Consultant
Eggplant is so versatile…I love eggplant and for the vegetarian in you – you will love this too. You can stuff eggplant with the roasted eggplant “meat”, mixed with sautéed garlic/onions and breadcrumbs…essentially – If you like it – you can use it to stuff it…..for this recipe – try to stuff it with Ricotta, spinach, roasted red pepper and sliced artichokes.
For this you need – 2 large eggplants, shallots, ricotta, spinach, roasted red peppers, garlic, parmegiana cheese, frozen artichokes and s&p.
Begin by slicing the eggplant in half – now score it lengthwise like 3 times and then cut across like maybe 5 times….do not cut through it – just score it so that after you roast it – you can scoop it out. Drizzle some olive oil and season with sliced garlic and s&p. Roast in the oven at 400 degrees until fork tender….
Remove and let cool….Once cooled – using a large spoon – scoop out the “meat of the eggplant”….set aside in a bowl.
Next the artichokes – you can use frozen artichokes – do not use the ones in a jar soaked in oil…..take the frozen artichokes and defrost. Now in a baking dish – mix the artichokes, a chopped shallot, sliced garlic, s&p and some more olive oil – just to coat…..toss and roast in the oven at 400 degrees until they are tender and golden brown. Do not burn. Remove and let cool.
Next – in a big bowl – combine the scooped out eggplant, and the artichoke mix….add in fresh ricotta, chopped spinach and some diced roasted red peppers. Mix well. Now add in a handful of Fresh grated Parmegiana cheese. Mix well.
Now – fill each eggplant with the eggplant, artichoke, spinach mix and place on a baking sheet. Return to the oven and heat through – no more than 15 mins max. Remove and drizzle a bit of balsamic vinegar over the top….maybe zig zag it for effect. Serve with a large mixed salad.