Holy Crypto Batman!  Bitcoin Pierces $66,000 – Try the Minestrone

Kenny Polcari Uncategorized

Natural, Landscape, Sky, Cloud, Park, Wood, Green

Things you need to know 

  • Earnings continue to surprise, investors are pleased
  • 10 Yr. treasuries yielding 1.64% – Investors unfazed
  • Holy Crypto Batman!   Bitcoin pierces $66k! Ethereum kissed $4300
  • Try the ‘Not your Mother’s Minestrone’

Stocks blasted higher – concerns over supply chain issues – no longer a problem, concerns about rising prices across the whole spectrum – no longer an issue, concerns about the FED tapering – are no longer an issue, concerns about rising interest rates – are apparently NO longer an issue….investors couldn’t get enough of stocks….earnings continue to surprise to the upside, guidance is good, companies telling us that while they are getting hit with higher input costs – they are passing them onto consumers….and consumers are apparently all in….No one is pushing back…..It’s just like Goldilocks – not too hot, not too cold, but just right…..

10 Yr. yields closed the day at 1.642% and that is also apparently not an issue either…. We are back to levels last seen in March – before they spiked higher to 1.77% – which WAS a problem then…. recall that as 10 yields hit 1.77% – the SPX fell 5% as some expected the market to fall even more…… talk of 2% was the norm…… But alas, it did not happen….…. buyers came in and scooped up what appeared to be a list of bargains……Since then, the markets have tried to test lower – falling by 3% both in May and July – before buyers stepped in….

The latest pullback in September did see the S&P retreat by 6%  – causing many to think – ‘maybe this is it…maybe this is the pullback….’ and then the buy the dippers saved the day…..taking the S&P back to its all-time highs….and now we are about to say goodbye to the ‘seasonally weak’ time of year and enter the ‘seasonally stronger’ end of year – and so it goes…By the end of the day – the Dow advanced by 0.4%, the S&P up 0.4%, the Nasdaq ended flat, the Russell up 0.6% and the transports?  They rallied by 1%.

Oil continues to surprise as well…. holding tight around $83/barrel….as demand is strong….and supplies are tight…. OPEC+ doing very little to ease the pain for global consumers…. US crude stockpiles falling by 430k barrels vs. the expected increase of 1.9 million barrels – (now that’s a swing.) Gasoline stockpiles also fell by 5.4 million barrels….and stockpiles at the Cushing, OK hub are back to levels seen in 2018…….  Yeah, but wasn’t the delta variant supposed to kill all this demand? Weren’t the talking heads telling us in August that oil would plunge again?  In fact, I think it was a GS call that warned of falling prices and then when they loaded up, they suddenly switched sides and warned of rising demand that would push prices to $100/barrel by year end….and now there are some that are trying to create more angst by calling for $200/barrel oil by this time next year.    In any event – oil is trading at $83 this morning as India, China, Europe, and the US all ‘ask’ the Saudis to play nice in the sandbox and pump more oil….

TSLA reported after the bell and broke all records…. beating on every line…. but the stock fell…. which makes some sense…. right?  Investors took this stock up 43% since July….it was priced to perfection…. what did you expect…? This morning it is quoted down $8…. which by the way is nothing…it’s an $850 stock…? $8 is exactly 0.009% lower….so stop the drama….

And the ‘beauty pageant’ continues…. ALK, DOW, ATT and DHR have already reported this morning and – yup…. they all beat the estimates…. There are another 15 reports due out at any time and the word is – Don’t worry, no problem….

Eco data today includes Initial jobless claims of 297k, Cont. Claims of 2.5 mil.  Philly Fed of 25, Leading Economic Indexes of 0.4%, Existing Home Sales of up 3.6% m/m…. (Yesterday saw mortgage apps fall by 6.3%).

This morning US futures are just a bit lower…. but please don’t panic…. what would you expect…investors/traders and algo’s have taken the market back to its all-time highs…? rallying 6% in as many days…. At 6:30 am – Dow futures are down 100 pts, S&P’s down 10, Nasdaq down 20 and the Russell down 9.

Drama in DC continues…. Dems can’t get it together…. Senators Kirsten Sinema and Joe Manchin holding tight to their values……. What was $3.5 trillion is now anywhere between $1 – $2 trillion and the left wing of the party is NOT happy.  And increased corporate tax rates?  That’s under attack now as well…. Kirsten is digging her feet in and that is driving Nancy and Chucky into a frenzy….

Yesterday – we heard that a Reuter’s poll of economists now expects no rate rises until 2023 – which is very different than what the market is expecting….and if you want my opinion – that is just a way for the FED to keep control of the narrative… – They get a poll to be released (conveniently ahead of the FED meeting), the results are counter to everything that the market expects…. They make sure that everyone knows this…. investors breathe a sigh of relief and go all in….in the end – the message is that the idea that a rate rise is coming by summer 2022 – is a false narrative.  Oh boy…. just wait….

European markets are all lower by about .5%.  This follows a mixed performance in Asia…. News that Evergrande’s deal to sell 50% of their property services business to Hopson fell apart…. causing renewed concerns for bondholders…. Other than that, there is no economic news to drive the markets, so the focus is on earnings….

Bitcoin – is trading at $66,000 and Ethereum is at $4,300 – as the excitement over the latest Bitcoin ETF continues to draw in investors…. suggesting that demand for this asset class is alive and well.

The S&P ended the day at 4536 – just hair below it’s all time closing high…. Earnings continue to ‘surprise’ and the eco data remains in line, treasury yields creeping up, inflation fears appear to be overblown, Oil demand is strong, Bitcoin is now closer to $70k than $60k and only 65 days until Christmas…There isn’t any new variant of covid to infect the world, then it feels like the investors are comfortable.  Remember – we still have the FED meeting on November 2nd and 3rd – where it is now expected that Jay will announce the start of the tapering as soon as mid-November….

The trendline suggests that we won’t hit resistance until 4700 – or 3.6% higher from here…. support is now at 4440….and Fundstrat’s Tommy Lee is now calling for S&P 4800 by year end….and that is up 6% from here…. which would leave the S&P up 27% for 2021!

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.

You can follow me on Twitter @kennypolcari and on IG @kennyp1961.
You can also find my daily videos on my YouTube channel – Kennypolcarimedia – My URL address here:  https://www.youtube.com/user/kennypolcarimedia
Take Good Care

Chief Market Strategist, Consultant
kpolcari@slatestone.com

Not Your Mother’s Minestrone

A vellutata is basically a cream sauce – a hearty delicious vegetable soup bathed in a cream sauce…. easy to make and delicious to eat….

For this you need:  Olive oil, chopped shallots, dice peeled butternut squash, 1 med zucchini diced -, celery diced, carrots diced, potato, peeled and diced, s&p, cecci beans or cannelloni beans, chicken broth, all-purpose flour, butter, whole milk, and a baguette – cut into rounds that you have lightly buttered and toasted….

In a large saucepan, heat oil over med high heat – Add shallots, squash, zucchini, celery, carrots, potato, and s&p.   Cook, stirring occasionally, 3 minutes. Now add 2 cups broth, bring to a simmer, and cook until vegetables are tender, about 10 minutes.  Now add in a can of the beans.

Meanwhile, in a small saucepan, add 1 cup of whole milk, whisk together flour and room temp butter. (Maybe like 3 tbls flour to 1/2 stick of butter).  Then add 3 more cups of milk, 1 cup broth.  Place on med heat and stir……bring it to a simmer then remove.

Add milk mixture to the vegetables, bring to a simmer and cook, stirring occasionally, until ingredients have blended…. taste, adjust and Boom!  It is ready……Serve the soup in warm bowls and top with a toasted round…. you can have grated cheese on the side if you wish….

Buon Appetito.