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Businessman, Superhero, Shadow, Brave, Motivation

  • Investor’s re-think everything – as Santa Claus gets ‘locked down’
  • Hysteria around rising case counts vs. severity counts – there is a difference
  • Europe threatens renewed lockdowns, US is said to be mulling it over as well – Blue states on the edge
  • MRNA comes out and reports efficacy rates for their ‘booster’ (conveniently it’s good news – stock rallies 5%)
  • Oil down 4% as the rapid spread of Omi attempts to kill demand outlook –
  • Joe Manchin says – ‘NO’ – joining 50 other senators that are not supporting the bill. – The far left loses their minds
  • Try the Prime Rib for Christmas

Good morning…. we are now in the final stretch of the year….and markets are under pressure – Asian markets ended the day down about 1.5% – 2%, European markets were all down greater than 2.5% but have since rallied back a bit and are now down about 1.25% – 1.5% – US futures are down about 1.5% and holding steady….

Over the weekend – so much happened……We had Senator Joe Manchin (D: WV) join 50 other senators that have chosen to vote against the BBB bill creating a migraine headache for the WH and sending the far-left wing of the Democratic party into a tailspin…. the headlines on Sunday announced it as ‘breaking news’….to which I ask – breaking news?  Where have you been?  Joe Manchin has been very clear for months now…. he was NOT supporting the bill, what were you not hearing?  In fact – Joe said that

“If he can’t go back to WV and explain it to his constituents then he can’t vote for it”

I guess he can’t explain it – the same way 50 other senators can’t explain it.

Then our friends at Goldman wasted no time in putting out a note – cutting 2022 GDP from 3% to 2% because of Manchin’s vote and more drama surrounding the latest variant of Covid.

Case counts surging – which makes for a great headline – because it creates panic…. yet the media is doing us all a great disservice – because fully vaccinated people (and for now that means 2 shots) are supposedly protected – according to Dr. Fauci, the CDC and others.  This morning Moderna comes out to say that their ‘booster’ shot in fact does show some 85% efficacy against the latest strain – and that is sending that stock up 6% in the pre-mkt.   So, while Omi is more transmissible, it is not necessarily more deadly – IF your vaxxed……But the markets this morning are supposedly under pressure as threats of renewed lockdowns and closures dominate the headlines…. …. Which I think is completely smoke and mirrors….

Let’s take a look at what has happened in the past couple of months…..inflation (around the world) keeps getting hotter, talk of central banks pulling back on stimulus happen daily, while at the same time those same central banks are becoming much more hawkish on the rate front…..and that is what is really  causing the latest pullback in the markets….It is a math problem… you change the inputs the output change….for example – 1+1 =2, but 1+5 = 6….see how that works…change just one input and you change the whole answer….so imagine changing 3 or 4 inputs….What do you think is going to happen?  Markets have to re-price initially until there is more clarity….and that is what is happening.

Analysts/strategists now dissecting every sentence that Jay Powell spoke last week – and coming to the conclusion that once the new year comes and he gets officially reappointed – then he can speak more freely and tell us all how really bad it is and how inflation is not going to 2% by the fall of 2022 – the way he told us it was, the same way that he told us for months that inflation was transitory and how did that work out?  More and more Fed members jumping the fence to play on the other side and that is what is driving the markets.   The BoE (Bank of England) taking first mover advantage and raising rates to combat the highest inflation rate that they have seen in decades – leaves us to wonder what is the Fed really thinking?  Omicron is just an excuse and as talk of renewed lockdowns and closures rises, the anxiety builds and investors ‘shoot first and ask questions later’.  How many times have we seen this?

This morning – as noted – US futures are down – the algo’s are having a party….interpreting the negativity in the headlines and taking advantage of the lack of liquidity in the pre-mkt….Dow futures are off 400 pts, S&P’s off 55 pts, the Nasdaq down 216 pts and the Russell down 35 pts….Dow, S&P’s and Nasdaq now about to breach intermediate support levels, the Russell having broken all 3 is testing the lows of August….2122…..if it fails there – it could get short term UGLY.

10 Yr. yields are at 1.38% this morning….as money moves into the safety trade.  Everything is under pressure…Gold down 0.5%, Oil down 4%, stocks down ~1.5%, Tech stocks down even more….

This is not the time to panic – remember who you are and what you are investing for?  Apple is still Apple, IBM is still IBM, AMZN is still AMZN, MSFT is still MSFT, NVDA is still NVDA – Capisce?  Their stories haven’t changed – in fact in my opinion – their stories only get stronger as selling pressure washes over global markets.

The S&P closed at 4620 – sitting right on the trendline at 4604….If futures hold true, then we will slice right through that on the opening  – and that will leave the intermediate term trendline in sight at 4521…or 2% from here….Possible? of course – and with the holiday shortened week upon us – anything can happen if you let the algo’s take control….So do not make long term investment decisions based on these next two weeks….unless of course they hammer really good names – then ‘back up the truck’!

Stay the course, build yourself in some downside protection to blunt the losses.  There is no reason to sell good stocks – Especially if the thesis for why you own them remains intact.

Remember you can text the word INVEST to 21000 on your cell phone to get my digital business card. Feel free to download it and send me off an email or text. Happy to engage and talk markets, planning, thoughts, concerns, and ideas.

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Take Good Care

Chief Market Strategist, Consultant

Prime Rib – A Christmas Favorite

Now – on Christmas eve we eat the 7 fishes and on Christmas day – we enjoy the classic prime rib…. Prime rib is easy to make – if you don’t overcook it….so make sure you have a good meat thermometer….
For this you need: 1 – 10 lb. Prime Rib, sliced garlic, S&P, and some thyme.

In a small bowl mix the garlic, olive oil, s&p, and thyme.

Begin by putting the roast in the roasting pan – fatty side up.  Now rub the roast – including the fatty side – with your mix. – Be sure to massage it well so that it is all seasoned.  Set it aside and let it come to room temp.

Preheat your oven to 500 degrees – when ready place the roast in the oven and ‘roast it’ for about 15 – 20 mins…. – then reduce the temp to 325 – and cook for about another hour or hour and half…. – You will know when it is done when the internal temp reads 135 – this should produce a beautiful med rare roast.

Remove it – tent it with foil and let it rest for 15 mins before you carve it.
Serve this with sour cream mashed potatoes, sautéed peas and mushrooms and a large salad.   Enjoy with a nice bottle of Brunello di Montalcino….

Buon Appetito.