Things you need to know.
– OK already – Gensler Caves and approves 11 Bitcoin ETF’s
– Stocks rallied ahead of 2 key inflation reports.
– Earnings now only 24 hrs. away
– Oil and gold remain in tight trading ranges.
– NY FED President Williams sounding ‘not so fast’.
– Try the Pork Cutlets Wrapped in Prosciutto
And so, it happened – the SEC finally relented and has approved (as if this was a secret….) .- recall that ‘someone’ made that announcement on X on Tuesday evening before it was debunked by an embarrassed SEC Chair Gensler – somehow saying that X – had allowed a ‘hacked’ announcement to be made – Vickie Huang and Paul Kieran – making note and blaming X for ‘manipulation in the Bitcoin market’ in their front page article in the WSJ this morning saying
“The argument that the Bitcoin market is rife with fraud and easily manipulated got a boost on Tuesday when the SEC’s Official X account was hacked.”
So, tell me – what does the hacked announcement have to do with the Bitcoin market? Absolutely nothing….so the logic makes zero sense – but you can see the ‘anti-bitcoin’ bias…
In any event – the news hit the tape ‘officially’ at about 3:50 pm on Wednesday – that all of the 11 amended applications for a spot Bitcoin ETF have been approved….– which just means that now – anyone that wants to own a piece of Bitcoin – can do so more easily – they no longer have to open an account at a crypto exchange to buy and sell it, they don’t need to worry about a crypto wallet any longer…. – They can just click on their Fidelity Account (or their E-Trade Account or their Schwab Account…or any other account) and buy Bitcoin by entering the proper symbol. ARKB – is the ARK Investment option, but you will be able to buy a Blackrock, a Wisdom Tree, a Bitwise Bitcoin ETF as well as a handful of others when they start trading today…..So expect all kinds of excitement and commentary surrounding this…..Bitcoin is trading $42.600 (+9.6% ytd) this morning…. Estimates by Standard Chartered – suggest that $50 to $100 billion dollars’ worth of investor assets are the expected to ‘move into the space’ over the year….Expect to hear more about a $100k price target – sooner vs. later. Expect to see the ‘Mooch’ and Mikey Novogratz and even the twins – Tyler and Cameron Winklevoss all come out of the woodwork pushing this narrative….
OK- next……and stocks rallied ahead of today’s latest CPI report….The Dow added 170 pts or 0.5%, the S&P up 27 pts or 0.6%, the Nasdaq surged by 112 pts or 0.8%, the Equal Weight S&P up 10 pts or 0.2%, the Russell adding 2 pts or 0.1% and the Transports added 91 pts or 0.6%…
New comments by some FED officials – also helping the improve the mood…..NY FED President Johnny Williams – telling investors that ‘monetary policy is now tight enough’ and that he expects that inflation will retreat – but qualified it by saying that the FED needs ‘more evidence’ of a cooling off……before they cut rates…..so it’s once again – a bet on what the next move and moves will be….Will we see a ‘possible’ 2 cuts in 2024 (the FED narrative) or will we see 6 cuts (the trader narrative) in 2024? I’m in the camp of 0 to 2 cuts…not even sure that we should cut at all….but you have to leave your options open so that you are not completely surprised…..But it seems illogical to me that anyone can expect more than 2 cuts….There is nothing that suggests that….So,
Will today’s November CPI report be that evidence? Well, I say no, but there are some out there that suggest we will start to see more evidence of ‘disinflation ‘ take root – meaning inflation ticks lower…..…Remember – today’s report is expected to tick ‘higher’ if even by 0.1% – leaving the annual rate at 3.2% on the top line and 3.8% Ex food and energy…and if it is – you can expect the rate cut bulls to dismiss it as ‘nothing to see here’ while a decline will only embolden that 6 cuts narrative…….
Remember that 3.2% and 3.8% is still well above the FED’s 2% target and last week’s payroll and wage data was hotter than expected….…. But look – it’s better than the 9.4% rate seen in 2022. Tomorrow we will get the November PPI report and that too is expected to tick ‘up’…. recall that higher prices at the PPI level take about 4 – 6 weeks to filter their way into the CPI report…We are also going to get Real Avg Hourly Earnings m/m and y/y at 8:30 as well.
Treasury prices fell (just a little) – helping to fuel the push higher – especially in tech – causing 10 yr. treasury yields to remain above 4%, while the 2 yr. is yielding 4.35% and the shorter duration bills 3 and & 6 month yielding 5.21% and 5.02% respectively.
Oil was weaker once again after the EIA reported an unexpected build in US stockpiles even as the Hootie’s continue to cause international chaos and possible supply disruptions in the RED Sea – additionally the UAE reports that while China is importing more oil, Japan, India and South Korea are not…and that supposedly suggests demand weakness…..….Yesterday it ended at $71.37 – although this morning – it is taking all that back – up $1.20 at $72.54 – as the focus returns to possible disruptions to supply and increasing demand estimates in 2024 and beyond. I mean – it’s nuts…and we remain in the $68/$75 range.
Gold continues to thrash around – testing trendline support at $2,029 for the 4th time in 4 days…. before ending slightly higher….and this morning it is up $8 at $2,036/oz…. leaving it in the $2,029/$2100 trading range…. a place where it’s been since mid-November. Some say that the Bitcoin news will steal dollars away from Gold and that will send gold lower…. – I’m not sure I see that – but it’s always a possibility. If we see gold fail to hold the trendline – then I would not be surprised to see it test the $1,990 level. Not sure I see gold moving substantially higher until it becomes a bit clearer about what the FED is doing.
Tomorrow starts the beauty pageant…and that will be led by JPM, BAC, C, and WFC….and while all of these stocks have rallied significantly off the October lows – JPM +26%, C +43%, BAC + 40%, and WFC +30% – they have all begun a pullback….and while they are expected to ‘beat the number’ I wouldn’t be surprised to see trader types hit the sell button to lock in those short term profits….. Recall, I think you need to pay attention to the Loan Loss Reserve Acct – that will detail how these banks are preparing for the months ahead…. continued deposits by these banks into those accounts will suggest that they expect more economic difficulty – think rising defaults on CC, HELOC and Mortgages. On Tuesday – JPM CEO Jamie Dimon – who called for a Hurricane to hit the economy last year downgraded his call to a storm this year saying that while he is not expecting a deep dark recession, he is not expecting a ‘soft landing’ either…. What will the others say? And then what will the other C-suits say in the weeks ahead?
Well, I suspect that the forward guidance in the TECH space to be much more robust…I mean all you have to do is look around to see what’s happening…so I expect that anything tech – information tech, cyber tech, disruptive tech, Semi’s, AI, Robotics etc.…to be strong for the next 6 months and for the year ahead and the year after that…..…..which supports why – they should have a place in your portfolio.
And recall – any company that intends on missing the estimates and has not confessed prior to announcing their results – should reconsider who is sitting in the C-Suite…..Investors do not like being ‘surprised’ unless it is to the upside….Downside surprises are never good…and investors tend to react badly….Perfect example – yesterday C pre-announced that 4th qtr. results ‘could be hit’ due to the drop in the Argentine Peso and the massive re-org they announced weeks ago – (they also announced a $1.3 billion loan loss reserve build just for the Argentine issue, not for any US concerns)… and that caused the stock to lose 0.7%….but had they waited until tomorrow – the reaction most likely would have been worse….because investors would have accused them of playing ‘I’ve got a secret” and that suggests there are more secrets. This morning C is quoted down another 30 cts…. or 0.6%.
US Futures are tossing around…. Overnight they were down and at 6:30 they are now UP…Dow futures + 10, S&P’s up 7, Nasdaq + 75 and the Russell is +4.
Yes, we wait for the CPI report – and then all the commentary surrounding what that means for the FED… Fitch Ratings is now out with a report that calls for NO recession in 2024 and for 3 rate cuts – which is no surprise…..they just mimic what the most common narrative is…finding support in the herd mentality… I suspect that Moody’s and S&P will follow suit any day now…Today and tomorrows data will be a catalyst for investors – my bet is that the reports will cause the trader types to reiterate the 6 cut narrative….something that makes no sense – especially because it is an election year and the FED should not be seen as political…….or is that wishful thinking?
European markets are all a bit higher today…. With markets up about 0.2% across the board. Nothing new on the eco front – they await news on US inflation figures today and tomorrow.
Concerns are rising over Taiwan elections this weekend…. Taipei reported 3 more Chinese balloons floating over their airspace yesterday…raising the temp in the region…. This will be an issue in 2024….and Taiwan’s dependence on the world will be tested. China has made it clear that Taiwan’s independence is at risk and that Xi Xi is taking it back…….no one should be surprised when it happens. Think Aerospace & Defense stocks.
The S&P closed at 4783 – up 27 pts…. Leaving it kissing up against its most recent highs- but unable to pierce it….There is a lot happening in the weeks ahead….Economic issues, earnings issues and Presidential politics…last night Christie dropped his bid – so now its just DeSantis, Haley and Ramaswamy that are looking to unseat Donny – something that the bookies are betting is not happening….in 4 days – we will hear from Iowa….will there be an upset or not? We’ll know in 96 hours….
Take good care.
kpolcari@slatestone.com
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
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Pork Cutlets Wrapped in Prosciutto and Pine Nuts Sauce
This is an easy recipe to make and one that you will enjoy time and again…
For this you need:
Pine nuts, Raisins – plumped in hot water and then drained, capers – rinsed and soaked in cold water, finely grated Grana Padano Cheese, chopped flat leaf Parsley, butter, chopped garlic, pork cutlets (pounded thin), prosciutto, s&p.
Pre heat the oven to 475 degrees.
Chop the nuts, raisins, and capers and mix well. Add in the grated cheese and parsley – set aside. Season the cutlets with s&p.
In a nonstick pan – melt some butter and sauté the garlic over med heat… Now add the seasoned cutlets and cook for no more than 2 mins per side. Now remove from heat. Next dress each cutlet with the nut/cheese mixture – roll it up and wrap in a slice of Prosciutto di Parma (you can use a toothpick to hold it together). Place in a baking dish and top with a touch of butter. Bake in the oven for 5 mins and remove.
Serve immediately with a tossed greens – simple – Arugula & spinach dressed with s&p, oregano, squirt of fresh lemon, touch of olive oil and red wine vinegar.
Buon Appetito
