Things you need to know.
– Stocks rose on a shortened trading day.
– Bonds rose, yield fell, oil and gold churn.
– XRP? What’s that? Up 390% in 3 weeks.
– Trouble brewing in France – Will that be a pre-cursor?
– Try the Veal Cacciatore
Stocks rose during a shortened trading session and closed November with their largest Monthly gains – a direct result of the rally in the semis and a sense of a rally that is broadening out. The S&P hitting fresh record highs, climbing 0.6% on Friday and more than 1% for the week. On Friday – the Dow gained 189 pts, the S&P added 34 pts, the Nasdaq gained 158 pts, the Russell added 9, the Transports gained 10 while the Equal Weighted S&P added 21 pts.
Treasury yields fell, with the 10-year yielding 4.17% and the 2 yr is now yielding 4.15%. Shorter durations of 3 months and 6-month bills are yielding 4.49% and 4.45% respectively. The dollar weakened as investors grew more confident that President-elect Trump’s trade policies will be more moderate than initially feared. Oil weakened; Gold rose while Bitcoin has yet to pierce $100k all while XRP has rocketed higher by 390% since election day.
Wait! What is XRP and why has it surged? XRP is a digital currency and the native cryptocurrency of the XRP Ledger, a blockchain platform designed for fast and cost-efficient financial transactions.
XRP was created to serve as a bridge currency for facilitating cross-border payments. Its primary goal is to enable fast and low-cost transactions between different fiat currencies, cryptocurrencies, or commodities.
The XRP Ledger is an open source blockchain technology developed by Ripple Labs, a fintech company based in the United States. It operates independently of Ripple Labs but is the underlying technology that powers XRP transactions.
XRP transactions settle in about 3-5 seconds, much faster than Bitcoin (up to 10 minutes) or traditional banking systems (several days for international payments).
Low Cost: Transaction fees on the XRP Ledger are minimal, typically a fraction of a cent.
The XRP Ledger can handle up to 1,500 transactions per second (TPS), making it more scalable compared to other blockchains like Ethereum.
XRP uses a consensus algorithm, not proof-of-work like Bitcoin, resulting in significantly lower energy consumption.
What are the use Cases?
Cross-Border Payments- reducing costs and settlement times.
Liquidity Provider: XRP can act as a bridge currency to provide liquidity in currency exchanges, especially in markets where direct trading pairs are unavailable.
Due to its low fees, XRP is also suited for micropayments and digital commerce.
Decentralization and Consensus
XRP does not rely on traditional (bitcoin) mining. Instead, it uses a consensus protocol among a group of validators to confirm transactions. This protocol is faster and more energy-efficient than proof-of-work systems. Now, none of this is a buy recommendation – it’s just information about what is happening in the crypto space and with Gary (Gensler) gone in January – the excitement is all around what happens next….As always – do your homework and make smart decisions based on your own situation.
OK – let’s get back to what happened on Friday.
Stocks saw their best month of the year (November), as investors poured a record $141 billion into the market – much of this move fueled by the expectation of more FED rate cuts and continued robust economic growth, with Disruptive technology stocks continuing to lead the gains – the ARKK ETF gaining a whopping 27% for the month leaving it up 11% ytd…..The S&P tech etf – XLK up 5.2% for the month taking it up 26% ytd.
Of the 11 Sectors – it was Consumer Discretionary that led the way higher – gaining more than 1%. Tech coming a close second up 0.9%, Industrials, Communications, Basic Materials and Consumer Staples all added better than 0.5%, Energy +0.4%, Healthcare +0.3%, Financials +0.2%, Utilities were flat while Real Estate lost 0.5%.
Further down the ledger we had – Homebuilders were up 0.3%, Retail was down 0.1%, Airlines +0.25%, The value trade + 0.3%, the growth trade + 0.9%, Semi’s + 1.4%, Cybersecurity + 0.3%, Metals and Miners + 0.5%, Big Pharma lost 0.2% Aerospace and defense gained 1.6%, Oil Exploration and Production gained 0.35%. Disruptive Tech up 1.45% even Emerging Mkts gained 0.2%.
Oil is up 65 cts this morning at $68.64/barrel…. leaving it smack in the middle of the current $66.50/$70 trading range. The OPEC+ meeting that was originally scheduled for yesterday (December 1st) has been rescheduled until Thursday, December 5th in order to accommodate several oil ministers that were attending the 45th Gulf Summit in Kuwait City…But this postponement does allow OPEC+ members additional time to deliberate on production policies amid challenges such as slowing global demand and increased output from non-OPEC producers. Analysts suggest that the delay may help align differing views within the group regarding future output strategies to come to the table.
The rescheduled meeting is expected to address potential extensions of the current production cuts and plans for any output increases in 2025. The outcome is expected to influence global oil markets – depending on what they announce, especially considering all of the recent geopolitical conflicts.
Gold is down $18 at $2664 this morning…leaving it smack in the middle of the trendlines…support at $2620 and resistance at $2705. The action in gold can be and should be attributed to a range of conflicting headlines….
The dollar’s decline from April – September (down 6%) caused investors to buy gold (+17%), we also know that a handful of foreign countries were stockpiling it as well causing gold to surge, and now recent dollar strength +6% (due to confusion surrounding rate policy) has put pressure on gold causing currency traders and investors to sell it – taking it down 6% off the October high.
Geo-political tensions will always cause some to buy it – seeing it as the ultimate ‘safe haven’ play.
US Economic policy expectations following the election have also caused some concern – as expectations of tax cuts and tariffs under the Trump administration are anticipated to reduce the number of interest rate cuts (and maybe could cause rate hikes) making Treasury bonds more attractive compared to gold, which yields no interest and pays no dividends.
And then we have street analysts offering their outlooks that only adds to the confusion…. with Goldman and Bank America calling for gold to hit $3000 by this time next year – representing a 12% move from here. Again, As always – do your homework.
Eco data this week – includes S&P Manufacturing PMI expected to be 49 (contractionary) and ISM Manufacturing – expected to be 47.6 (further into contractionary territory) while ISM Prices paid is expected to rise to 56 up from 54.8 (think inflationary).
Wednesday brings the November ADP report – expected to show 158k new jobs, and the S&P and ISM Services PMIs of 57 and 55.5 respectively – both in expansionary territory. But the BIG number will be Friday’s NFP report….that is expected to show an increase of 200k new jobs – this against last month’s dismal 12k jobs….but remember – we got hit by 2 hurricanes and a Boeing strike – both of those are behind us now…so expect the jobs market to bounce back. Unemployment is expected to remain at 4.1%. How will all of this play into FED Think? We’re about to find out….
This morning US futures are churning – Dow futures are down 25, S&P’s down 8, Nasdaq down 30 and the Russell is up 5.
European markets are mixed – eco data showed a deterioration in Eurozone and UK manufacturing. Germany and Spain up 1% with France down 0.3% as a new crisis is building in Europe – the far-right party in France is threatening to topple the gov’t after a stand-off over a budget battle. Political instability causing French bonds to get crushed as investors demand higher yields to hold French debt. Remember – markets do not like uncertainty – and political instability causes market uncertainty – but the real question is what is France going to do to bring their deficit down? For that matter what is the US going to do to bring its deficit down?
The S&P closed at 6032 – up 34 pts taking us to another new closing high for the year. If you draw a trendline – it suggests upper resistance to be 6080 – with support down at 5838 (50 dma). I for one, have been surprised that we saw NO pullback at all – post the election – and while I think we still can – it is also year-end and there is lots of re-positioning taking place – think Santa Claus rally. I am still in the camp – that we churn a bit lower and then end the year right here. I think Santa has already come – but there are plenty of analysts that think the melt-up is still ahead of us. Here is my appearance with David Asman on Friday on Varney & Co. – Where we discussed this very point.
https://www.foxbusiness.com/video/6365327469112
Questions? click here to send me a message about the Santa rally (put KP in the message box) and to learn more about Slatestone Wealth and how we can assist you in planning for the future.
https://slatestone.com/contact-us/
Take good care.
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
Disclosure: The content provided in this material is designed for educational and informational purposes only, and it is important to note that it does not constitute personalized recommendations. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of Kenny Polcari or SlateStone Wealth.
The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.
While considerable effort has been invested to ensure the accuracy and dependability of the information presented, we must clarify that we cannot guarantee the accuracy of third-party information. Our usual sources for third-party data include channels such as Bloomberg.
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 have substituted the chicken with veal.
You brown the veal and then cook it in the sauce and serve it over a long pasta – Spaghetti, Linguine, Bucatini, Perciatelli, etc… (your call). If you make it on a Saturday and let it sit overnight – it is always better the next day.
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. *** you want veal top round cut into 1-inch cubes….
Once you have browned the meat – remove and place it 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 orange/yellow ones then feel free to use that also. Sauté the onion and peppers and 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. Now (optionally) add one can of sliced mushrooms (draining the water first) 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 the 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.
