The Weatherman was Right – Stock Rise – Try the Halibut

Kenny Polcari Uncategorized Leave a Comment

Things you need to know:

  • Talks continue – but now Mitchy is getting in the way
  • Wales and Ireland go into ‘lockdown’ mode
  • Virus surges in the US, but anxiety does not
  • More earnings today… VZ, NDAQ, ABT, IPG etc…
  • UK/EU get closer to a BREXIT deal
  • Try the Halibut

My appearance yesterday on the TD Ameritrade Network with Nicole Petallides – click here to see it.

I guess the weatherman WAS right yesterday… the sun did come out and it looks like Nancy and Stevey are closer to a deal than not… but now it’s Mitchy McConnell that is causing angst on Capitol Hill –or at least that is what it sounds like. Remember that Nancy had imposed a Tuesday evening deadline to reach that deal… and while they did not reach a final deal, they are apparently closer than ever so Nancy agreed to blow past that deadline and work towards an agreement… The bid is $1.88 trillion while the offer is still at $2.3 trillion… Nancy told her fellow Democrats that:

“Today’s deadline enable us to see that decisions could be reached and language could be exchanged, demonstrating that both sides are serious about finding a compromise”

While WH Chief of Staff Mark Meadows said:

“We’re not just down to a difference of language and a few dollars. We still have a way to go”

While Mitchy McConnell is warning the WH to NOT rush into an agreement before the election (he is thinking that the GOP maintains control of the Senate)… as he tries to force a $500 billion bill thru the Senate – which is stripped of the elements that the Democrats support – huge assistance to states and local authorities, tax credits for families and relief for the airlines… In the end – the jury is still out… if a deal doesn’t get written and done by this weekend then it is unlikely that it will get done prior to the election. Tick, tick, tick…

So stocks rose on Tuesday as investors/traders and algo’s focused on these discussions… once again not paying any attention to surging virus cases and local lockdowns around the world (issues that caused the markets to sell off on Monday)… US economic data was better than expected – Housing Starts and Building Permits rose substantially shining a bright light on the economy and while some will credit that to the rise in stocks yesterday – I say ‘baloney’.

Every sector except Consumer Staples were up… and value stocks outperformed growth. By the end of the day the Dow rose 113 pts, the S&P advanced by 16 pts, the Nasdaq rallied by 38 pts and the Russell gained 4 pts.

Look – the action is not being driven by earnings or macro data at all…it is – as I said back in September – being driven by politics, stimulus and the virus… and once we get past November 3rd it appears that the action will be driven by a contested election, mail in ballots, stimulus and the virus…

Lockdowns and closures across Europe are piling up again…

Wales and Ireland imposing draconian lockdowns again… In Wales ‘everyone must stay at home’ for 2 weeks, while in Ireland they have closed the country down… Non-essential stores are now shut, and people must stay at home – only allowed to go out to shop for food or to  exercise – all within 3 miles of where you live. As of midnight on Wednesday – Ireland will impose this lockdown for SIX weeks… (December 1st-ish)… In Spain – we saw frontline workers demonstrating out in front of a local hospital in nothing but their ‘skivvies’ to make people aware that they don’t have the proper protections, France and the UK have imposed curfews… and Italy is beginning to reconsider localized shutdowns…

And in the US – the virus is surging (or so they tell us) and while local lockdowns are being considered, no one expects another full lockdown across the country, mail in ballots are being returned in record numbers, Trump appears to be running out of money, while Joey’s coffers are full of cash, more recent polls suggest a narrowing of the race, stimulus talks continue (which I think is a ruse…) and earnings continue to beat at an above average rate… (remember – the bar is low…) There is more economic data and more earnings to get through, but many investors are pushing that aside as we all await the next and final Presidential debate tomorrow evening in Nashville, TN – at Belmont University – hosted by none other than NBC’s Kristen Welker.

Mics will be muted during the 2 min response to a question and then all hell breaks loose again… mics will be live and it will up to Kristen to control the ‘boys’. What will she ask? What are the topics this time around? On Monday – Robert Frank (CNBC) ran with a piece detailing that the Biden tax hikes will cause top all in tax rates to be in the 62% range for some residents in CA, NY, NJ and other ‘blue’s states… 62% – will she ask about that? And while some will say that doesn’t apply to anyone making less than $400k – I say ‘challenge’… because then the WSJ ran with an article that detailed how tax rates will soar and everyone will get hit with higher rates to pay for the gov’t run health insurance that Biden/Harris and the Dems want to impose… health insurance by the way that members of Congress get to opt out of… you see – they have their own ‘Cadillac policy and plan’ and have no intention of giving that up at all… Does Bernie tell you that? I never heard it in any of his stumps – did you? Nah, I didn’t think so.

Will she ask about Donny’s taxes? (that’s helpful)… Energy policy? Will she ask about regulation? Will she ask about packing the court? Will she ask Donny to denounce white supremacy? Will she ask Joey about antifa? No matter what she asks – it doesn’t really matter does it? Are you going to change your mind? Is this final debate going to change you vote? Most likely not… and it certainly can’t change the 30 million ballots that have already been mailed in…

This morning – US futures are essentially flat… as of 6 am… the Dow is up 5 pts, the S&P is up 2, the Nasdaq is up 8 pts and the Russell is up 6 pts. Netflix reports disappointing numbers and a slowdown of subscribers as the competition from Amazon, Disney, Hulu, Peacock etc. heat up… the stock falls 6% in the after-hours session and this morning is quoted down $28 or 5%. If it opens there, it will have pierced trendline support at $505 and will most likely look to test intermediate support at $490… Look – the stock was up 66% ytd… so now it’s up 60% ytd… get a grip… SNAP on the other hand is soaring… Revenues and earnings beat the estimates… positive momentum in the ad market driving the latest results, DAU (Daily Active Users) up 4% – 249 million people using SNAP every day… SNAP is quoted up $7 or 25% in the pre-market… just fyi – SNAP is a tech company and social media company… they develop mobile camera apps that allow you to send and receive photos, drawings, texts and videos… this stock was up 80% ytd but as of this morning is now up 100% ytd… they allow you to SEND and RECEIVE photos and drawings… what am I missing? (Apparently – it is true – TINA – There is No Alternative!)

And JPM sends a shot across the bow at the Fintech industry… taking on PYPL and Square… competing for small businesses and the consumer… JPM is offering its own version of a fast funding/payments fintech service – called QuickAccept payments… seamless card payment via a mobile app and same day funding to their clients and its FREE… PYPL and Square don’t have the ability to offer same day funding and it’s not FREE – so get ready for more action in the Fintech space…

Trump is travelling across the swing states holding ‘larger than life’ rallies in his final appeal to voters… Joey, on the other hand, has been holed up in his basement preparing for tomorrow’s debate.

Earnings today include: TMO (they beat), BKR, NEE, AN, BIIB, NEP, SDGR, IPG, LAD, KNX, VZ, APH, NDAQ, ABT to name a few.

Eco data: Mortgage apps and the FED’s Beige Book

European markets are all DOWN… they are saying that they don’t think a US deal is coming… but there may be a UK/EU deal… Michael Barnier – the EU Chief Negotiator told the European Parliament that

“Despite the difficulties we’ve faced, an agreement is within reach if both sides are willing to work constructively, if both sides are willing to compromise and if we are able to make progress in the next few days to resolve the sticking points, the trickiest subjects.”

This commentary did provide some optimism, but talk of lockdowns, lack of US stimulus and lack of clarity over the US elections remains the focus. As of 6:30 the FTSE -1.07%, CAC 40 -0.85%, DAX -0.68%, EUROSTOXX -0.80%, SPAIN -0.84% and ITALY -0.82%.

The S&P closed at 3443 yesterday – up 16 pts… This morning – with futures flat – investors and algo’s are awaiting the latest news on a stimulus deal… Just sayin… it feels a bit tired… and talk of a deal (if there is one) may not result in a spike higher at all… and if there isn’t one then look for a test of 3400 once again… In any event – I still say that there is volatility ahead… So sit tight.

Take good care –

Kenneth Polcari
Chief Market Strategist, Consultant
kpolcari@slatestone.com

Halibut w/Mushrooms, Leeks and Clams

This is easy and delicious. It makes you feel like you are on the beach with the sand between your toes… Enjoy

You need if you can get it Pacific Halibut – because the Pacific Ocean is colder year round vs the Atlantic and the fish does not fall prey to some of the parasites that exist in warmer waters. Atlantic Halibut is best eaten in the colder months when the water is at its coldest…

Ingredients: Halibut, mushrooms (preferable oyster mushrooms), butter, 3 lg leeks, s&p, chicken broth, 2 doz littleneck clams and chopped Italian parsley.

Season the Halibut with s&p. Set aside.

Start by melting the butter in a sauté pan over med heat – do not burn the butter – add sliced mushrooms – like 2 cups and the sliced leeks. Trim the leeks and use only the white and light green part of the stalk – discard the rest. Season with s&p and reduce heat to med low and cook for about 10 mins or until the leeks are soft. Now add about 3 cups of the chicken broth and raise the heat to med hi – let it come to a boil.

Now add the fish and clams to the sauté pan – wait for it to re-boil and then reduce heat to low and cover. Cook for about 6 or 7 mins… make sure all of the clams have opened. If you still have some unopened clams – remove the fish and the opened clams and continue to cook for another 3 mins or so to give the stubborn ones a bit more time. At this point throw out any unopened clams.

Serve this dish in a full-size bowl (shallow is best) bathing in the clams and broth topped with the mushroom and leeks. Sprinkle with the chopped Italian parsley at the end. Enjoy this with a crisp, chilled white wine.

Buon Appetito.