Things you need to know
- It’s a holiday week – the market usually advances
- Continued inflationary pressures leave some to consider chicken?
- Lizzy Warren is blaming rising oil prices on price gouging – laughable
- All eyes remain on focused on the WH and its FED announcement – Has the mkt voted for Lael?
- Try the Chicken Scarpariello (for Thanksgiving)
Stocks closed mixed on Friday – as the focus – temporarily – has shifted from the macro data to more of the political headlines….as we move into the holiday shortened week. Rising new covid cases across Europe and again here at home also driving some of the concern…Austria in full lockdown again…. infuriating the citizens as Germany warns it may follow suit as well…. Public outcry is starting to turn to renewed protests across Europe –
The Dollar rallied, Treasury bills rose in price sending yields lower (1.57%), Gold backed off (down $11 at $1842), Oil declined ($75.95) -think dollar rally and the latest narrative on rising covid cases again potentially hampering demand (not!) and the argument over what to serve for Thanksgiving dinner continues…with prices soaring for everything from cranberry sauce to turkey gravy and all of the vegetables to boot many people (are apparently) considering serving chicken for dinner on Thursday…..a 20 lb. turkey costs anywhere between $40/$45 – which is a about a 100% increase over last year….0.99 cts/lb. last year to nearly $2/lb. this year…..and that is causing all kinds of angst for so many…..But – it is what it is….
Prices are soaring everywhere you look….
Over the weekend we had Lizzy Warren telling MSNBC’s Joy Reid that the reason oil prices are going up is because big companies like XOM, CVS etc.…are ‘price gouging’ (Here is the clip-on Twitter) – essentially taking advantage of the public to maintain margins….it was comical to watch…. click below…. Lizzy wants you to ‘think about this way’….
Is it me? Oil has more than doubled in price – going from $35 to $80 since January….partly because the world opened up and demand is strong (as I had been saying for months), Joey has eliminated a lot of the US production capacity and when oil was down – Rig counts fell….because why should any company lose money to produce anything…..the cost of getting oil out of the ground is about $45/barrel in the US – so when oil was trading below that – oil companies pulled back – makes sense…..and then as prices started to rise and companies wanted to come back online – Joey said – ‘not so fast’ and then he threw the control back to OPEC+ and now he is begging them to produce more to assist in lowering prices – How’s that working for you?
So, Lizzy – come again? Why exactly do you think prices at the pump are up? I wonder what she thinks about housing prices. Would she sell her $4 million home for $1 million – I mean is she price gouging a buyer? Who does she hold responsible for rising home prices? Or lumber prices? Or appliance prices? Or roofing prices? Or flooring prices? Or Window prices? Or siding prices? I guess they didn’t teach Econ 101 at the University of Houston – class of 1970.
And then this morning I was driving to work and CNBC’s Worldwide Exchange reports that the Biden administration is considering publicly shaming / reprimanding companies that are passing on higher costs to the consumer by raising prices….well, it’s a long list of companies that are passing along those price increases – some of them multiple times over the year….so let the games begin….start calling them out….and see where that gets you…..It’s insanity, I say…..
In any event – the house passed the $4 trillion bill – according to the CBO -Congressional Budget Office on Friday and now has sent it to the Senate – where it is DOA in its current form…unless of course Chucky and Joey start promising Manchin and Sinema all kinds of ‘perks’ to get them to flip sides….Stay tuned….on a side note – 16 House Democrats have now officially announced that they will not run in the mid-term elections – for one reason or another – how many more will abandon the ship before the new year?
By the closing bell on Friday – the Dow gave up 270 pts, the S&Ps lost 7, the Nasdaq rose by 64 pts, the Russell fell 20 pts and the Transports rallied by 21 pts.
This week is a holiday shortened week – and if history prevails – we should expect to see the indexes end the week a bit higher…. the holiday move begins on Tuesday afternoon….and portfolio managers are entering GTC (Good til cancelled) buy orders below current levels and sell orders above current levels to take advantage of any outsized move while they are away from their desks….
Next up – what will Joey do about the FED chair…? That is the question that investors and traders want answered…. will it be staying the course with Jay, or will Joey decide that it is better to put his stamp on the FED and replace Jay with Lael? In the end – I do not think that investors will have a visceral reaction at all…I just think it wants clarity…that’s all…Remember – Lael is considered MORE dovish than Jay….so if anything the market will celebrate her appointment – or maybe it already has…the S&P is up 10% since the October speculation started….is that a vote for Lael? Does the market believe that she is next in line? In any event – let the countdown begin for the FED announcement any day now….
Eco data today includes – Chicago Fed Survey and Existing Home Sales – expected to be -1.8% m/m – which does make some sense because of the time of year…but that weakness has done little to cause prices to retreat….as sellers just expect demand to surge at the start of the season in February.
US futures are up strongly…. (As noted above) – Dow up 165 pts, the S&P up 20, the Nasdaq ahead by 177 and the Russell up 20…
In Europe – markets across the region are also in positive territory…. ranging anywhere from +0.3% to 0.6%. Investors keeping a keen eye on the latest spread of Covid 19 across Europe…. German in fact over the weekend did impose strict containment measures…Austria in full lockdown…. who is next? Europeans are also paying close attention to Joey’s FED pick and they then speculate on what that means for the global economy and other global central banks…. Think ECB, BoE, BoJ, PBOC, RBA, etc.….
Oil is up 7 cts this morning, Gold is down another $10, while 10 Yr. T Bills are yielding 1.57% this morning. The VIX is steady at 18…. Do not expect any macro data to be relevant this week…. the focus will really be on the FED announcement……and the drama taking place in DC over the latest spending bill.
Bitcoin is down another 3.8% at $57,200 – while Ethereum is down 4.3% at $4,175.
The S&P closed just below the century mark to end the day at 4697. This morning’s move will take us up and thru 4700 again testing last weeks high of 4718……. Remember – the trendline suggests that we should hit some resistance at 4730…. Expect trading volumes to retreat and that could cause some outsized moves…… Expectations for a strong holiday shopping season remain front and center and calls for S&P 4800 by year end is alive and well.
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Take Good Care
Chief Market Strategist, Consultant
Chicken Scarpariello (For Thanksgiving?)
Chicken/Sausage/Sweet Vinegar Peppers – a bit of a take on the traditional Scarpariello dish – (you can use hot cherry peppers if you prefer – I cannot)
You will need: Thighs & legs, (bone in/skin on), s&p, olive oil, sweet Italian sausage, Vinegar peppers, garlic, white wine, chicken broth, marinated artichoke hearts, thin sliced potatoes, s&p, and flour. Total time 1 hr… start to finish….
Preheat oven to 375 degrees – Preheat grill for cooking the sausages.
Season chicken pieces with s&p – heat up oil in frying pan – when hot – reduce heat to med/hi – now add chicken and brown on all sides – maybe 10 mins total. While this is cooking – place the sliced potatoes in the baking dish – season with s&p – add a splash of oil. Now remove the chicken from the frying pan and place in the baking dish and put in the oven and continue to cook for about 30 mins….
Next – cook the sausage on the grill – careful not to burn…. maybe like 10 mins total…. remove from grill and let rest for 3 or 4 mins then cut into bite size pieces. In the meantime – add the chopped garlic to frying pan (that still has the juices and oil from chicken) along with sliced vinegar peppers – sauté. Now add the sausage and some white wine and reduce (5 mins) – next add chicken broth and the artichoke hearts…. sauté for another 5 – 8 mins…
In a separate bowl – whisk together some flour and milk (you can use water) and add to the frying pan – allowing it to cook and thicken a bit….do not let it get too thick – you can add a bit of broth if you need to. Re-introduce the chicken/potatoes to the frying pan and allow to simmer for 2 or 3 more mins.
Now serve on a large, warmed platter family style. Accompany with a large mixed salad dressed in a balsamic vinaigrette dressing. Enjoy your favorite chilled White wine –