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Bitcoin, Cryptocurrency, Virtual, Money

Things you need to know.

  • Stocks push higher as any and all concerns abate
  • The big banks reward investors…big divvy increases and buybacks
  • 10 Yr Treasury remain quiet, Gold backs off, Oil holds tight
  • Cathie Wood – files for a Bitcoin ETF
  • Try the Chicken Scarapiello

Stocks continue to push higher…in a clear sign that investors are not concerned at all about apparently anything…. not inflation, not rising rates, not infrastructure, not rising taxes, not covid…. get the picture?  Demand for all assets remains strong…The S&P is up 8% this quarter and we haven’t even added in dividends yet….the Nasdaq is even better –  up 10%, while the Russell is up 6% and the Dow is up only 4% for the quarter….and in a turn of events – the Transports which were up nearly 11% by mid-May – have backed off and are in the last position up only 3% for the quarter as of today.  And the ytd performance would define a successful full year for anyone with the Dow and Nasdaq up 12%, the S&P up 14%, the Russell up 17% and the Transports up 18%.   It has been an amazing journey – the persistent climb in stocks and other assets underscores how strong the markets are and how intent investors are to put money to work….

A report this morning out of Morgan Stanley reveals that 50% of independent companies are raising wages for employees which means that they are raising prices for consumers….so brace yourself for a higher cost of living.  A cost which I will argue is not going to be ‘transitory’ at all…. but that is another conversation.

Facebook is now the 5th member of the ‘trillion dollars’ club…. joining you know who- Google, Microsoft, Amazon, and Apple…

10 yr. treasury yields remain below the 1.5% mark ending the day yielding 1.47% and the VIX fell once again ending the day at 15.71 – a level not seen since February 7th, 2020 – right before the onset of the pandemic here in the US that sent the VIX soaring to 85.47 during that meltdown that began on February 21st, 2020.

Gold which rallied 14%  into the low $1900’s when we all thought that yields would spike to the 2%+ range that began in late March has since retreated and once again broken down through all 3 trendline supports ending the day at $1770/oz – a decline of 7.25%…where it should begin to find support….Oil is holding steady in the low $70’s with no sign of weakness but the OPEC+ meeting begins today with an announcement due out on Thursday – expectations are for the cartel to slowly increase supply by 500k/barrels/day beginning in August….but do not expect this to put pressure on prices at all….demand is robust, the economy is strong and the world is still waking up…so sit tight….we’ll be at $80 by the end of the summer and IF Goldman is correct – we’ll be at $100 by year end.

And Wall St banks are now doing exactly what I detailed last week post the stress tests…. given the green light by the FED’s – the big banks are all announcing big dividend increases and even bigger stock buybacks…. Morgan Stanley – doubles its dividends, JPM increases its dividend by 11%, GS by 60%, BAC by 17%….

And Cathie Wood announced that she and her ARK Investment Fund has filed with the SEC to create a Bitcoin ETF and IF approved it will trade under the ticker symbol – ARKB…. And speaking of Cathie Wood – her tech disruptor ETF – ARKK which everyone was calling for dead when the growth group came under pressure last month – has done a complete turnaround – gaining 35% off the May low and has now pierced all three trendline resistance points and appears to be on its way to challenge the highs of $160/share.  This makes sense since the Nasdaq is also up 11% off the early May lows when all the talk was of rising rates and what that would do to the growth names….and since rates are not rising anytime soon according to Jay Powell…. expect the party to continue……And the Growth trade trounced Value yesterday with the SPYG up 1% while the SPYV was down 0.6%!

There is not any economic data today to report that would be considered a market mover….so we wait for tomorrow’s ADP employment report and Friday’s NFP Report…those are the TWO most important data points this week….and the whisperers tell us that the report is going to be stronger than the estimates….
US futures are churning…. Dow up 48 pts, S&P’s down 1, Nasdaq off 18 pts and the Russell down 2.  Very much the same story…. Building excitement over a supposed infrastructure bill, no change in stimulus, no change in rates and better earnings expectations all will continue to force money into stocks.

European markets are up about 0.5% this morning…. The concerns over the rapid spread of the latest covid variant across the Asia region doing little to blunt demand….ECB (European Central Bankers) are starting to discuss when and how to begin a taper that will unwind the massive ‘emergency’ bond purchase program launched last year to deal with the onset of the pandemic (just like the FED did 3 weeks ago) …now to be clear this is NOT a broader taper conversation about ending the GFC bond purchase program – but that is coming….the ECB will follow the lead of the FED….. and that is expected to begin later this year.  EZ inflation reports for June came in at 27.1 up from 22.2 in May and Producer Prices rose to 36 from 29.9…in another sign of rising price pressure across the region.

Bitcoin is up another 2% – trading at $35,600 Ethereum is trading at $2.200 and doggey coin is trading at .25 cts…

The S&P closed at 4,290 – another new high after testing 4292…. trading in a tight range of 4274/4292.  Each day – investors forcing the close – closer to the highs than the lows…and this sets it up for another test higher…. Futures action suggests that we will most likely churn again today…as we await employment data later in the week.  Normal backing and filling should be expected….

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

Chicken Scarapiello

This is the classic Chicken and Sausage dish.  There are many ways to make this – so it is about being creative…. remember – if you have the basics down – you can make it your own by improvising seasonings etc.  Try this one – it is easy and very good. For this you need:

Chicken pieces on the bone!  Legs and thighs are always best – the dark meat is tender, juicy, and moist.  Breast meat does not work with this recipe.  Sweet Italian Sausage (you can use hot sausage if you prefer), sweet cherry peppers (you can substitute hot if you like), potatoes, garlic, olive oil, s&p, Italian Herb seasoning, red wine vinegar, Chicken stock and cut Italian Parsley.

Preheat the Grill.

Preheat oven to 475 degrees – In a roasting pan – add in the potatoes (you can slice them, qtr. them, cube them – your call) – season with s&p and some of the Italian herb seasoning, drizzle some olive oil and a dollop of butter – toss and roast for 25/35 mins…. stirring occasionally. remove.

Rinse the chicken and dry with a paper towel.  Season with s&p and the Italian herb seasoning.  Set aside.

On Med – hi – Heat some olive oil in a large frying pan.  When hot – add the chicken pieces skin side down – do not crowd…Cook the chicken until golden brown – careful not to keep turning the pieces – the trick is to let them brown nicely before turning…. You should be thinking maybe 4/5 mins before turning…. (But watch – as you do not want it to burn). When browned – remove the chicken and place in the roasting pan with the potatoes arranging nicely.  –

Next place the sausages on the grill – the trick is to just get the grilled flavor…. stay close so that they do not burn…. turning as they cook.  When done – remove and slice into bite size pieces.  Add to the roasting pan.

Now – add the chopped garlic to the frying pan and sauté until golden – do not burn. Next add in the sweet cherry peppers – you can cut these in half and remove the seeds.   Sauté.  Now add in about ¼ cup of the red wine vinegar – allow it to come to a boil – scrape the sides of the pan to release any of the browned bits.  When the vinegar is reduced by half – add ½ cup of white wine…bring to a boil and then reduce by half.  (no longer than 4 mins max).  (If you want a thick sauce – then feel free to add some flour or corn starch to thicken it up – I do not think you need it – but that is the beauty of cooking – you choose).
Now add the chicken stock – about 1 full cup – once it comes to a boil – remove from the heat and pour the whole thing into the roasting pan with the chicken, sausages, and potatoes.   – Place back in the oven and roast – as it is roasting the sauce and all the parts will blend nicely.  You should only need to keep it in the oven for 15/20 mins….  Remove from the oven – toss in the chopped parsley and serve.

This makes a great dish for a summer cookout.  Easy to make a lot of it and present it family style on a nice platter – accompany with a large mixed salad and you are good to go.

Buon Appetito.