Issues?  Don’t be Ridiculous….Nothing to See Here – Try the Veal Cacciatore

Kenny Polcari Uncategorized Leave a Comment

Question, Really, Question Mark, Doubt, Museum

Things you need to know

  • Issues? What issues?  Don’t be ridiculous
  • Earnings continue to beat on all lines
  • Everything rallies…. Everything….
  • OPEC tells Joey to relax…more supply is coming (in January)
  • Crypto’s gets two ETF’s – Proshares & Invesco coming next week
  • Try the Veal Cacciatore

 
Issues?  What issues?  Inflation, covid, supply chains shortages, labor issues, threats of workers striking (that’s the latest threat to employment stability – DE, and K are just the two most recent to get hit with worker dissatisfaction), political infighting, tapering, interest rates?  Apparently, NONE of it was an issue yesterday at all….as investors took stocks higher…. Solid earnings are allaying fears that rising costs and supply chain issues will hit companies hard and that whole ‘stagflation’ issue – yeah – no one is paying any attention to that ….

By the time the closing bell rang the Dow added 534 pts or 1.6%, the S&P’s up 75 pts or 1.7%, the Nasdaq up 250 pts or 1.7%, the Russell up 32 pts or 1.4% and the Transports tacked on 233 pts or 1.6%.  The 10 Yr. treasury ended the day LOWER at 1.51% and that too only added fuel to the fire…as declining treasury yields will force money into stocks as investors search for opportunity.  Gold was up, silver was up, natural gas was up, and OIL was up (Saudi’s thumbing their nose at Joey) and Bitcoin and Ethereum were UP as well…. I mean, you can’t make this up….

At 8:30 am we got the PPI report (Producer Price Index) which is a reading that details what producers have to pay for products that go into the production process – otherwise known as ‘input prices’ and while they were elevated they were slightly below the estimates -which suggests (or that is what they told us) that while there is inflation, it is under control vs. being out of control…And then we got jobless claims and continuing claims – both readings coming in better than expected – so it’s all good.

And then we have all the earnings reports that are so far beating (lowered) estimates on all lines…. BAC, WFC, C, USB, DPZ, MS, and that only added to the excitement….no matter that all the other issues are boiling on the back burner….  And forward guidance is not downbeat at all…because while earnings are better, they are history…. you’re not buying stocks yesterday based on what those companies reported for the last qtr.…. if you are buying them, you are buying them for what you expect future performance to be….and because you like the story…. you believe in the story…  If you told me, you bought any of these names because they beat the estimates, I would say ‘wrong answer’…. go back and try again…. So, I guess, investors are happy with what they are hearing from the C suite concerning what the future is….and that is why you should be buying stocks.

So, what is interesting is that ‘supply chain’ issues and ‘labor shortage’ issues are real…. I mean just count the times that all the talking heads repeat these two phrases…. every one of them detailing what those issues mean for business, products, consumers, and the holidays….  And while the media is doing a great job of instigating even more angst – investors pushed it all to the back burner…. not paying any attention to the warnings that these talking heads are screaming about.

If I hear one more person tell us how ‘the shelves are empty’ or there is ‘nothing to buy’ for the holidays, I’ll say, that’s great – do something different – offer up ‘experiences’, take your kids and expose them to what life is like in other parts of the country or world.  Go see the Grand Canyon or Yellowstone National Park, Drive the Pacific Coast Highway from start to finish, go to the theater, visit Maine, New Hampshire, or Vermont.  Try Nashville and the Grand Ol’ Opry, check out the Rockies, Visit Cape Cod, or go skiing in out west. Build houses for habitat for humanity, expose your kids to changing the world.   Go to a cooking class, or learn a new skill, take your kids to Europe or South America, dare yourself to do something different! 

Do something that allows you to be free of the ‘China grip’ – because that is what it is…. we have made ourselves dependent on China. We have moved all our manufacturing and pharmaceutical production by the way, to other parts of the world and now we are being held hostage….  Ok – enough of me ranting…

This morning stocks around the world are all UP…. Taiwan surging by 2.5%, Japan up 1.8%, Hong Kong up 1.4%, China up 0.4%, Australia up 0.7% and South Korea gaining 0.9%.  Beijing finally addressing the Evergrande issue saying that it is a unique situation that no one needs to worry about – the rest of the real estate sectors is just fine….so nothing to see here – very much like they did with Covid – nothing to see here, move on.

European markets are also on a tear….as corporate earnings are driving the sentiment now…. European investors taking stocks higher even as they digest rising inflation readings across the zone……France reported that September inflation readings fell by 0.2% m/m but rose by 2.7% y/y.   At 6:15 am we see the FTSE +0.2%, CAC 40 + 0.5%, DAX +0.5%, EUROSTOXX +0.6%, SPAIN +0.5% and ITALY +0.6%.

US futures are up again today as we await another set of earnings from PNC, GS, COIN, PLD, SCHW and TFC (they already reported and beat the estimates).  I fully expect that we will hear more beats today….and better guidance….

Dow futures are up 138 pts, the S&P’s up 16 pts, the Nasdaq up 50 pts and the Russell is up 10 pts.
Eco data today is full of reports…. Empire Manufacturing of 25, Advance Retail Sales m/m expected to be -0.2%, Ex Autos of +0.5%, Ex Autos and Gas of +0.4%, Business inventories of +0.6%, U of Mich Sentiment of 73.1 and U of Mich 1 yr. inflation expectation of 4.7% and 5 yr. expectation of 3%.

Oil is up again…. trading at $82.04/barrel after the Saudi’s and OPEC + told Joey that they are not increasing production until the new year…. (As planned).  Until then the IEA (Int’l energy Agency) told us that the crisis will continue to push up natural gas and oil prices and that demand for oil will increase by 500k barrel/day resulting in a supply gap of 700k barrels/day through year end.  That’s too bad because we have so much of it in this country, we could easily relieve the supply issues…but that’s another story.

In any event – yesterday’s action is suggesting that investors appear to be ‘ok’ with what they heard yesterday, on all fronts…. And while they are all screaming about supply chain issues, it is not stopping them from jumping in the pool.

Bitcoin – is trading at $59,000 and Ethereum is at $3700. This as the SEC is about to allow Bitcoin Futures ETF’s to trade as the deadline looms…and this is a watershed moment for the industry that has been fighting the SEC for years now.  Gentsler is going to allow this to proceed because Invesco and ProShares have designed these ETF’s using mutual fund rules which provides ‘significant investor protections.  This is big news for the industry….so sit tight…. now is not the time to sell your Bitcoin or Ethereum.

The S&P ended the day at 4438 – right at the day’s high….so we can expect another push higher…. just like when it closes on the day’s lows, we can expect another push lower on the next day.  Last night’s close puts us up and thru the 50 dma (trendline resistance).  It will be important to see how it closes tonight…. will we continue to move higher, or will we rally and then fail as morning turns to afternoon?  4436 is now key to watch…it has become support (once again) – the upside now is 4550….

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

Veal Cacciatore

Literally means Veal prepared hunter style (cacciatore). In Italian – the cacciatore is the hunter and the hunter prepared his meals with braised chicken or rabbit, garlic, tomatoes, onions, bell peppers, mushrooms, peas seasoned with oregano, basil, wine, and S&P.  In today’s recipe I am using veal stew (the top round cut into bite size pieces) in place the chicken or rabbit.

Start by sautéing crushed garlic in olive oil…add the seasoned veal pieces (s&p) – Just brown the veal – no need to cook all the way through as it will cook in the sauce.

Once you have browned the meat – remove and place on a platter.  Next add sliced onions, and bell peppers – use 2 lg onions and 1 green and 1 red bell pepper – if you like the orange/yellow ones then feel free to use that also.  Add in the sliced mushrooms.  Sauté until soft – about 10 mins… season with s&p.   Remove from the pot – now add two cans of kitchen ready crushed tomatoes – not puree – just crushed tomatoes.  Then add one can of water (and 1 cup of red wine – optional).

Season with s&p, oregano, and fresh basil…bring to a boil and then turn heat down to simmer.  Add back the veal, onions & peppers, and mushrooms and one bag of frozen peas.  Let simmer for 45 mins – stirring occasionally.  At this point it is done – but like I said – the longer it simmers the better it is and if you let it cool and refrigerate until the next day – it is like you died and went to heaven.

When ready – bring a pot of salted water to a rolling boil and add the pasta… cook for 8 – 10 mins or until aldente.  Drain – reserving a mugful of pasta water – and return to pot adding back about 1/4 of a cup of the pasta water to moisten… let it sit for a min and absorb the water…now add 3 or 4 ladles of sauce and toss.  Add two handfuls of grated cheese – Locatelli Romano works great – toss again and serve.  You can serve with the veal, or you can serve the veal on a separate platter in the center of the table.

This meal works well with a nice Chianti – remember this is a meal prepared by the hunter – he is a simple man so the wine should reflect his simplicity.  Does it get any better?

Buon Appetito.