Things You Need to Know
- Stocks head higher again. And who is complaining?
- Friday brings the September CPI – mkt awaits.
- Rare Earths? Trump signs an $8.5 billion deal with Australia, Tech Surges.
- Bonds, Oil steady, Gold traders are taking ‘profits’.
- AAPL is on the cusp of being a $4 Trillion company.
- Try the One Pan Thighs
Well, we took it all back and then some! Stocks surged on Monday the Dow rose 515 pts or 1.15%, the S&P up 71 pts or 1.1%, the Nasdaq added 310 pts or 1.4%, the Russell – took the lead – rising 48 pts or 2%, the Transports added138 pts or 0.9%, the Equal Weight S&P added 75 pts or 1% while the Mag 7 tacked on 520 pts or 1.6%.
Remember what we said yesterday – when the algo’s latch onto the positive or negative headlines – it’s off to the races! And of course – who is gonna complain when the S&P advances by better than 1% in a day and individual names advance even more. AAPL +3.9%, TSLA +1.8%, GS +1.7%, CRM +4.6%, UNH + 2.2%, MRK +1.8%, ACN +1.6%, JPM + 1.6%, BA +1.8%.
And who is gonna complain when the SMID’s (small and mid-caps) advance by 2%? Not too many people, but when the SMIDS decline by 2% – all hell breaks loose. It’s comical.
Of the 5 earnings reports we got – all 5 beat on the top and bottom lines…this means that nearly 85% of companies that have reported so far (63) this season have crushed it….that is well above the 72% avg at this time during prior earnings seasons.
And that alone is enough to send stocks higher – what it says is that apparently the economy is just fine, companies are not issuing cautious guidance in fact quite the opposite. Which once again causes me to ask – why exactly are we cutting rates into a strong economy that is still showing signs of sticky inflation?
And we are going to get a read on the September inflation this Friday when the gov’t publishes the latest CPI report – you know the one that they couldn’t report last week because of the shutdown. Apparently, the BLS (Bureau of Labor Statistics) is calling back some employees to produce the Consumer Price Index for September because the data is needed to calculate the annual cost-of-living adjustment for Social Security beneficiaries because – under Federal law they have to publish that adjustment by November 1st. Today is October 21st.
Now to be clear – the September CPI is expected to show that inflation remains sticky. CPI m/m up 0.4% while CPI y/y is expected to tick at +3.1% up from 2.9%. Core CPI (ex-food and energy) m/m is expected to be up 0.3% and up 3.1% y/y. The surprise will be if it is weaker than the expectation…. So, we wait.
And then the cooling tensions between Donny and Xi Xi only added fuel to the advance. And guess what else? Do you remember how China was holding ‘rare earth’s’ over our head and the heads of other countries only last week? Threatening to cause all kinds of chaos in the supply chain? Yeah, well don’t worry – In less than 5 months the Trump administration negotiated a rare earth elements (REE) critical minerals deal with Australia.
Yesterday – on top of everything else – PM Anthony Albanese visited the WH and signed an $8.5 billion agreement creating a pipeline for those critical resources – apparently Australia is loaded with REE and ranks among one of the top countries for both reserves and production. It is a major producer and has substantial untapped reserves, making them a KEY player in the global supply chain – a clear blow to Xi Xi and the Chinese demands.
And don’t forget – Alaska has large amounts of REE that are currently untapped due to permitting challenges and environmental regulations because much of it is on federal lands. There is though significant interest in developing these resources to reduce US dependence on China and secure supply chains for national security.
As you might imagine this only added to the excitement causing the whole sector to explode….REMX (rare earth ETF) rose 1.45% – taking it up 85% ytd…..Individual names up even more: MP +2.6%, (+431% ytd), ALB +3.6% (+11.7% ytd). And the excitement over REE ignited another rally in the tech sector, since tech is so dependent on these minerals. Thus, the performance in a range of tech subsectors – Disruptive Tech – ARKK +4.4%, Semi’s +1.7%, Cyber +1.8%, Robotics and AI – BOTZ +2.8%.
And in another hot headline – Apple is on a tear – up 4% yesterday – Dan Ives of Wedbush fame and one of the streets most respected tech analysts is confirming that
“our Asia checks show strong iPhone demand globally with further improvement in the China market. With Apple on the doorstep of joining the $4 trillion market cap club, it’s clear that Cook & co have a hit with the iPhone 17. Now it’s the AI roadmap!”
Oh and the gov’t shutdown – yeah, rumor has it that this is about to come to an end as well – Some of the more moderate Democrats have come to their senses and have decided to buck the trend and separate themselves from the progressive left now that the No Kings rallies are over. They were afraid to do it before, but now they appear to have had it. Enough is enough – time to do your job. The chatter is that by the end of the week – the shutdown will be over – we can only hope.
Bonds ended the day higher…the TLT + 0.4% and the TLH + 0.3%. and that caused the 10 yr to once again breach 4% to end the day yielding 3.98%. The 30 yr is now yielding 4.56%.
Oil churned in place yesterday – trading in the $56.30/$57.81 range. This morning it is up 12 cts at $57.64. You know the story – nothing new to see here.
Gold! Rallied a bit yesterday, taking back some of the weakness we saw on Friday… but this morning, it’s under pressure again — down $95 at $4,261. It finally feels like the gold bugs are taking profits after months of relentless buying that pushed it deep into overbought territory.
Late last week, its RSI was 87 – remember, 70 suggests overbought — so it was only a matter of time before the trader types locked in some gains. Look, it’s a crowded trade, so I wouldn’t be surprised to see it test the $4,000 range — a 6% reset.
And keep this in mind: gold is still up 59% year-to-date, so there’s no reason to get anxious over a little pullback. As of 5:30 a.m., the RSI has cooled off to 71.88 — still hot, but a little less so.
This morning US futures are digesting the move higher! Dow futures are down 65 pts, S&P’s -6, Nasdaq is down 22 pts while the Russell is down 5.
Earnings this morning include some big names across a range of industries: PHM (Homebuilders), MMM (Diversified Industrials), KO (Non-Alcoholic Beverages), DHR (Life Sciences and Diagnostics), LMT (Aerospace & Defense) , NOC (Aerospace & Defense), RTX (Aerospace & Defense), HAL (Oilfield Services and Equipment), GM (Autos) & GE (Aircraft and Parts).
European markets are mixed. Italy up 0.7% while Germany is down 0.2%. The UK market it up 0.2% ahead of the UK finance Minister’s crucial Autum budget – which is expected to impose strict measures aimed at bringing expenditures and debt under control.
The S&P closed at 6,735 up 71 points. We are just 32 pts away from the 2025 all-time high (6762). It’s big week of earnings and tomorrow begins the Mag 7 with TSLA and GOOG due to report after the bell.
Here’s your new countdown:
8 days until the next Fed decision.
34 days until Black Friday.
And only 54 days until Christmas.
Let’s review your plan. Call me for a complimentary, no-obligation portfolio analysis: 561-931-0190.
Take good care,
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
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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.
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One pan Skin On chicken Thighs.
This is so easy – and will soon be a family favorite.
For this you need: Thighs, skin on, bone in, s&p, adobo, garlic, carrots, onions, white wine, chicken stock and olive oil. You can also use some fresh rosemary – I don’t like it, but that doesn’t mean you don’t.
Now – put your thighs in a bowl and splash with a bit of olive oil. Season with s&p and adobo. Massage the thighs to get them ready. (Here is where you would add the rosemary).
Heat up a large deep sauté pan – When it’s hot – add the thighs – skin side down and cook until browned. Turn them – and cook for another 2 mins. Now add the chopped carrots and onions. (leave them nice size – do not dice). Add a splash of white wine – let it burn off.
Next add ½ c of chicken stock and then turn heat to low, cover and cook for 45 mins.
When done – serve on a platter family style – serve with a mixed salad.
Buon Appetito!