Things you need to know
- FED Shocker! Rates might RISE?
- Eco data continues to show a robust economy.
- Oil and Gold up on geo-political concerns. Bonds down on rate concerns.
- AI Swarms? Get ready – they are coming….
- Try the Veal/Potato Meatballs for lunch, dinner or a party.
Oh boy! Fed mins showed that ‘several’ officials think that the FED may need to RAISE rates if inflation remains sticky! WHAAAAAAT?????
And a ‘vast majority’ of them (realizing that there are only 12 voting members – so what defines a ‘vast majority’ – 8, 9?) think that sticky inflation NOT softer employment is the issue going forward suggesting that you can take any rate cut off the table for now….and with that the bets for a June cut have now fallen to 51% – down from 55% – so still likely, but maybe not!
At the same time – yesterday’s eco data was better than expected – Mortgage apps up 2.8%, Durable Good were down 1.4%, but were expected to be down 2%, Cap Goods Ordered were +0.6%, Cap Goods Shipped +0.9% (both better) while Industrial Production came in at +0.7%. Housing Starts – coming in at +6.2% blowing away the expectation of +1.1% while Building Permits jumped by 4.3% vs. the expected 0.4%.
So what did this tell us yesterday……the economy remains robust, inflation, while not a real problem yet, is not dead and the FED is not in a hurry to cut rates …and this must be making Stevey (Miran’s) head spin while leaving Kevy Warsh wondering why he took this job……(Remember, JJ is basically a lame duck now….his countdown has begun…..).
In the end – there wasn’t any panic, but there is a realization that growth remains firms (that’s good) and inflation remains a concern. But here is the part they do not want to say out loud – although I have mentioned it numerous times over the year….
Historically, inflation has had a nasty habit of coming in waves — especially when the FED eases too soon. The classic case is the 1970s. (I was in high school 1975 – 1979) – Inflation surged in 1973 and exploded in 1974 – peaking at 12%, recession hits in ‘75, inflation begins to cool, the FED starts to cut and BOOM – the second wave – 1978-1980 hits hard – inflation peaking at 14.5%.
This is exactly what JJ is trying to avoid and the ghost in the room? Sticky Inflation!
When this happened – newly nominated Chair Paul Volcker had to crush it with sky-high rates (think 21%) to restore credibility. The lesson? Declare victory too early and you risk a second, more painful surge.
Now, before you go and light your hair on fire – it isn’t necessarily a guarantee, but it does tend to re-accelerate when the labor market stays tight, fiscal policy remains stimulative, supply pressures linger, or financial conditions loosen too quickly.
Ok, so that was then, this is now…. Inflation expectations are better anchored, the Fed can move faster, and the structure of the economy is different. But services inflation is still sticky and growth remains firm. Recall that we are a 75% services economy and that’s why the Fed is cautious. Their biggest fear isn’t a mild slowdown — it’s losing credibility and having to fight Round Two. Capisce?
Ok – so what did stocks do? The Dow rose by 129 pts, the S&P up 38 pts, the Nasdaq added 175 pts the Russell up 12, the Transports gained 272 pts, the Equal Weight S&P rose 46 pts while the Mag 7 gained 245 pts.
Bonds got sold…..(no kidding) sending yields up. The TLT fell 0.4%, the TLH lost 0.3%. The 10-yr is now at 4.09%, up from 4.02%, while the 30 yr is at 4.72% up from 4.69%.
Oil surged – but not because of the strong eco data, but because of growing concerns about a military showdown with Iran. This after the Ayatollah shut down the Strait of Hormuz for 3 hours warning that they plan on launching rockets on Thursday…. (that’s today) – but the question is – Are they launching them at the US fleet? Are they launching them towards anyone in particular? Are they launching them into the sky as an attempt to show strength?
In any case – oil rose by $2.75 or 4.4% and this morning it is up another $1 at $66.12. It is now testing the January high of $66.50 – a move up and thru that will set it up for a test of the June highs of $70 – UNLESS the tension subsides….
Now what we do know is that the nuclear talks are advancing – so that is good, but any closure of the Strait will disrupt shipments and that will continue to put upward pressure on prices.
Gold continues to churn around the $5,000 mark. Yesterday it traded from $4,855 – $5,010 – and this morning it is trading at $4,995 as gold bugs focus on what the FED mins say about the future path of rates as well as the building tensions in the Mid-East. For now, it remains in $4,690 (trendline support) and $5,115 trading range. The path of least resistance is to the upside – just based on all of the ongoing geo-political tensions.
Bitcoin is trading at $66,500, Ethereum around $1,960, and Solana is $81.
The dollar? It continues to advance towards short-term trendline resistance at 97.99. A no rate cut scenario will help support the dollar and a push up thru 97.99 will force it to test intermediate and long term trendline resistance at 98.55 – where I think it will struggle. Support remains at 96.80.
European markets are all lower…..nothing specific – just more churn…. Italy down 1.25% – other markets across the zone are down about 0.7%.
This morning US futures are lower…. Dow is -165 pts, the S&P’s down 17 pts, the Nasdaq is down 85 pts, and the Russell is down 12 pts.
Earnings today from WMT, SO, NEM, RIO, W, ETSY DBX….
Eco data today includes – Initial Jobless Claims, Cont. Claims and Pending Home Sales – which are expected to be up 2%.
For years we’ve talked about “smart logic algos” — programs that scan headlines, react to keywords, and move markets in milliseconds. That alone changed the game. Then came LLMs — large language models — reshaping how we work, write, research, and communicate.
But what’s coming next makes today’s algos and LLMs look like rotary phones — and half the people alive today don’t even know what that is.
We’re moving into the era of AI swarms. And if you haven’t heard that phrase yet, you will.
This isn’t one program reacting to a headline. It’s networks of autonomous, goal-seeking agents interpreting data, coordinating decisions, and executing across systems at extraordinary speed. This isn’t reaction anymore — it’s distributed intelligence. Decision-making spread across multiple independent agents instead of centralized in one brain.
And when you layer in agentic AI — systems that set objectives, delegate tasks, adjust in real time — the feedback loops in markets, media, and capital flows don’t just move faster… they compound. That’s the structural shift. Acceleration on a scale we’ve never operated in before.
And the players? GOOG, META, ANTHROPIC, NVDA, MSFT, AMZN, PLTR, CRM, NOW, CRWD, PANW – and the list goes on….and all names that have gotten whacked recently taking many of them into bear mkt territory….All names we discussed yesterday.
And here’s the real irony — while everyone is debating rate cuts and CPI ticks, the real structural shift is happening right under your nose…..Just sayin’…..
The S&P closed at 6,881 – up 38 pts after testing as high as 6,909. We remain in a tight range…..with the trendline at 6815 ish being support while 7,000 represents resistance. This morning futures are teasing lower – but not with any real force….Remember what I said – the algo’s are testing the bulls…wanting to see when they will become exhausted….because when they do – they will put pressure on the market- seeing how far they can go….a break below the trendline only amplifies that possibility – so sit tight…..
Call me at 561-931-0190. Let’s talk about whether the risk in your portfolio actually matches your tolerance — because this works both ways. You may be taking too much risk… or not enough to reach your goals.
Take good care,
[email protected]
Source: Bloomberg, CNBC, Reuters, Wall Street Journal
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Potato & Veal Meatballs with Carrots & Artichokes
These are great as appetizer type cocktail party dish or can be paired with a mixed green salad and become a light lunch or dinner meal. Unlike traditional meatballs – these do not go in the sauce…..and you do not serve these with spaghetti.
For these you will need: 1 lemon, bag of frozen artichokes, 2 lg Idaho potatoes, 2 lbs. of ground veal, finely chopped thyme, 2 lg egg yolks, fresh grated parmegiana cheese, whole milk, s&p, butter, olive oil, about 3 cups of beef broth, 4 med carrots – peeled, cut in half lengthwise and then cut into bite size chunks, 1 shallot diced, splash of dry white wine, ˝ 1 c of heavy cream, and chopped parsley.
In a saucepan, bring beef broth to a simmer; remove from heat and cover to keep warm.
Next boil the quartered potatoes in salted boiling water until soft – maybe 15 mins? Drain and then crush in a classic potato ricer into a large bowl. Add veal, thyme, 1 egg yolk, cheese, milk and s&p. Mix well with your hands -do not over mix.
Form into balls…. now if you are using as an appetizer then make them small bite size balls…if you are using as a lunch or dinner – then make the more traditional “bigger than a golf ball but smaller than a baseball”.
In a large nonstick high sided pan – heat a dollop of butter and a bit of olive oil over medium-high heat – fry meatballs, turning occasionally, until well browned and cooked through, – depending on the size will dictate the time….small balls – 4 mins or so…larger balls – maybe 7 mins or so….remove and set on a plate lined with a paper towel.
Add a bit more olive oil in the nonstick pan and heat on med high. Add shallots and sauté for 3 mins…. Now add artichokes & carrots. Cook, stirring frequently, for about 4 mins.
Add wine and broth – bring to a boil, reduce to a simmer and cook for 10 minutes. Now add meatballs (If you like – you can add in a bag of frozen peas at this point in the process) and continue cooking for about 10 more mins…. gently turning meatballs halfway through. You want the veggies to be nice and tender.
In a separate bowl – squeeze 1 teaspoon juice from the lemon. Whisk together with the remaining egg yolk and cream. Carefully introduce this mixture into the pot with meatballs. Return broth to simmer and cook for 3 minutes. Sprinkle with parsley.
Buon Appetito.