Saudi's Talk Oil Down, Investors Take Mkt Up

And the Santa Claus rally continues.....mkts rallied to NEW highs as investors/traders celebrate the 'patience' of the FED. You have to wonder - Will the FED ever normalize rates?

Despite the move to new highs - volumes remained subdued....of particular interest is the fact that oil fell $1.87, - The Saudi's oil minister - Ali al-Naimi - continued to talk it down - saying that it is NOT in the interest of OPEC to cut oil production - no matter how far prices fall......

"Whether it goes down to $20, $40, $50, $60, it is irrelevant"

he went onto say that the Saudi's were prepared to increase output and GAIN mkt share as lower crude oil prices are a net positive for the global economy and lower prices will increase demand...

Energy stocks took it on the chin - even in the face of that Barron's cover piece - highlighting the opportunities being created in the sector - yet the broader mkt ignored weaker oil and marched to new highs....Very different from three weeks ago when weaker oil was blamed for the mkt sell off......

It is important for the FED and the administration to keep stocks in positive territory - it just feels good....and as we have seen - it does not take much to create the nervousness.

The National Association of Realtors reported that existing home sales tumbled 6.1% to a seasonally adjusted annual rate of 4.93 million in November. Economists had expected existing home sales to edge down to 5.20 mil. And mkt breadth? Not so good.....Even as stocks move ahead to new highs - breadth remains a bit weak... This suggests that broad based support is not as strong as what the mkt is telling you..... this powerful week long advance is all about the 'intervention' and not about the fundamental economic data.

Eco data - This morning will be busy in terms of the headlines - between 8:30 and 10 am we will get a number of broad macro data points..... final revision to 3rd qtr GDP - expectations are for an increase to 4.3% - with some estimates as high as 4.7%, Durable Goods, Cap Goods, Personal Consumption and Univ of Mich Conf Survey round out the day's macro data and essentially closes the books on the year. Watch the bond mkt after the data....

If the data is good - then bonds should decline - reflecting those same improving fundamentals - but again - we are at year end - unless the data is such an outlier - there may not be a reaction one way or the other - as so many have put off any new decisions until the new year.

Volumes to remain low - for the balance of this week - next week - will see some last minute yearend tax loss selling as the final bell rings.
US futures are teasing higher once again....currently +2.8 pts at 2075. I will look for the mkt to continue to churn - no reason at the moment for the mkt to sell off - I mean if it didn't sell off yesterday on the Saudi comments then sit back and put on the party hat.

Overnight - China was in focus as iron ore prices weakened again...raising new concerns about growth. China fell by 3% and Australia fell by 1.1%.

In Europe - mkts there are all in positive territory - Keep your eyes on Greece and Ukraine. The Greek Parliament again failed to elect a President, ( PM Samaras’s candidate getting just 168 votes). The focus is now on the final election on the 29th - Samara's needs 180 votes. This was not unexpected. Second, Ukraine officially dropped its “non-aligned” status suggesting a shift towards Europe. This move will only serve to make Vladimir nuts...surely escalating tensions.

I am out tomorrow and back on Friday - depending on the action - my note will be sporadic over the next week. Have a great holiday season - enjoy the moment and the precious time with family and friends.

Christmas Morning Banana Bread French Toast

This is that great recipe that is more like a dessert than breakfast - but trust me - it is a great breakfast. I got this recipe 28 years ago from a dear friend - it never disappoints

For this you need:
Banana bread, Haagan daz vanilla ice cream, eggs, warm maple syrup, butter and some powered sugar(optional).

Beat the eggs - add in the melted vanilla ice cream - mix well. Now cut thick slices of the banana bread and soak in the egg/ice cream mix.

On the stove - heat up a non stick frying pan and melt the butter - keep heat on med do not burn the butter. Add the slices of banana bread and cook. Flip it over and repeat - place on a warmed plate and drizzle with the warm maple syrup. (shake some powered sugar on top if you like).


Buon Appetito.