-
It’s Friday – just 6 hours until the weekend.
-
Stocks continue to push higher on the idea that 50 bps is still a possibility.
-
Bonds up, yields down, Oil up and Gold makes a new high.
-
Futures are up, but it is Friday the 13th!
-
Try the Chicken, Sausage and Sweet Vinegar Peppers.
The rally continues…. can you say $1.3 trillion? - Because that is what happened this week…. The S&P has gained $1.3 trillion in value…. So much for that sell off! (Although today is Friday the 13th for those that suffer from Triskaidekaphobia)
Every major S&P group advanced…Communications gained 1.9% and was by far the winner, Consumer Discretionary gained 1.21% and then behind that we saw 1% moves in Energy & Basic Materials and then the other sectors fell in line….Tech +0.8%, Industrials +0.75%, Consumer Staples 0.6%, Healthcare + 0.35%, while Utilities and Financials carried up the rear – adding 0.2%.
At the end of the day – the Dow gained 235 pts or 0.6%, the S&P up 40 or 0.75%, the Nasdaq up 175 pts or 1%, the Russell added 26 pts or 1.25%, the Transports gained 90 pts or 0.6% and the Equal Weighted S&P added 40 pts or 0.6%.
The PPI – inflation at the Producer Level – surprised us just a bit m/m – coming in 0.1% greater than the estimate while the y/y numbers came in spot on, in addition unemployment claims ticked a tiny bit higher (more about that below) ……. So now what? Well, for me it does not change the narrative at all, but for the algo’s and traders it apparently does…..….and so, the market rallied on the idea that maybe next week we will get a 50 bps cut…..(they just won’t let go of that….). Now, don’t get me wrong – I love when stocks go up…. makes me feel all warm and cozy…. but as I told you – I do not believe 50 is in the cards and therefore ‘I do not believe the volatility is over’….
Which doesn’t mean that you should be selling your portfolio, it just means remain cautious with what and when you’re adding….…New money will sit in cash until you put it to work…. –because I think we still have another leg down….and guess what? If we don’t that will become clear…. And then we can revisit and reevaluate – remember, you are invested, so you are participating in any rally that takes place. Now, if you are just starting out that’s different – you have to jump in to start the process…. Again, give me a call to discuss…
Here is the link to my appearance with Charles Payne yesterday – where we discussed this very issue.
https://video.foxbusiness.com/v/6361890378112
Bonds fell sending yields up…. the TLT down 0.5% while the TLH gave up 0.4%.... the 2 yr. bond is now yielding 3.658% while the 10 yr. is yielding 3.683%. Today is the 7th day of being un-inverted - and still no recession….
Oil gained 2.8% leaving it at $69.18 and this morning – it is up again…. trading at $69.45. It is the ongoing Hurricane Francine story…that has shut down 40% of the production along the gulf coast… (this is temporary….) so once it passes – it will be all about how China demand is slowing and how the US economy is slowing and how non-OPEC producers are flooding the market with oil – blah, blah, blah…because those were the arguments last week……So, you can’t tell me that all of that has changed in one week…. In any event. – oil should hit resistance at about $73.50 (and that’s not the trendline), it’s the August lows – the trendline is way up at $75…. So, stay tuned.
Gold surged by $44 or 1.8% to end the day at $2580 (a new closing high) and this morning it is making another new intraday high…up $17 at $2597 – let’s see where it closes…. – …. This after the ECB cut rates again by 25 bps (and indicated more to come) and after the PPI report supports lower rates in the US. Recall – lower rates cause the dollar to decline and that causes gold to rise. (inverse relationship – dollar down, gold up, dollar up, gold down)
And yesterday the Dollar lost 0.45% - on top of the 4.75% that is has lost off the July high. Gold on the other hand is up 10% during that same time frame. Capisce? It’s that inverse relationship again…
This morning – US futures are higher as the opening bell gets ready to ring…. Dow futures are + 50, the S&P’s up 10, the Nasdaq +19 while the Russell is up 14. All this as investors, traders and algo’s all bet on the size of next week’s rate cut….Now, let me be clear….it’s going to be 25 bps, BUT remember what I said at the top of the page….while the PPI ticked slightly higher, Initial jobless claims ticked up (think unemployment claims) and that is causing some traders to push the idea that a weakening labor market DEMANDS a bigger cut….Ok, cowboy – slow down…Initial jobless claims were 230k vs. the expected 226k…..That a difference of 4k claims – not 40k claims….And as stocks tick higher, bonds tick higher as well and that is sending yields lower once again….This morning the 2 yr. yield is down 6 bps at 3.57% while the 10 yr. is at 3.64%.
The S&P closed at 5595 up 41 pts… Next week brings us Retail Sales, Industrial Production and Capacity Utilization along with Housing Starts, Building Permits and Existing Home Sales. But the BIG event is Wednesday’s FOMC rate decision….so sit tight…. Remember – it’s not the 25-bps cut that everyone wants to hear, it’s what he says about the November meeting and beyond…. Will he leave the door open to a bigger cut or will he close it….He’d be foolish to close it, so I expect the same old commentary…..it’s all about the data….right now the data calls for slow and steady….but that could change!
In the final analysis - long term investors need to remain focused and balanced. Building a strong, well diversified portfolio takes time and commitment….
Tune into to Varney & Co at 9 am this morning…. I will be co-hosting the 9 am hour with Lauren Simonetti – Ashley Webster is anchoring as Stuart is taking the day off.
Chicken, sausage and sweet vinegar peppers
You will need: Thighs (bone in/skin on), s&p, olive oil, sweet Italian sausage, Vinegar peppers, butter, garlic, white wine, chicken broth, marinated artichoke hearts and flour. Total time 1 hr... start to finish....
Preheat oven to 375 degrees - Preheat grill for cooking the sausages.
Season chicken pieces with s&p - heat up oil in frying pan - when hot - reduce heat to med/hi - now add chicken and brown on all sides - maybe 10 mins total. Now remove and place in a baking dish and put in the oven and continue to cook for about 30 mins....
Next - cook the sausage on the grill - careful not to burn.... maybe like 10 mins total.... remove from grill and let rest for 3 or 4 mins then cut into bite size pieces.
In the meantime - add the chopped garlic to frying pan (that still has the juices and oil from chicken) along with sliced vinegar peppers - sauté. Now add the sausage, a bit of butter and some white wine and reduce (5 mins) - next add chicken broth and the artichoke hearts.... sauté for another 5 - 8 mins...
Re-introduce the chicken to the frying pan and allow to simmer for 2 or 3 more mins.
Now serve on a large, warmed platter family style. Accompany with a large mixed salad and a green vegetable – maybe some sautéed broccolini.
General Disclosures
Information and commentary provided by ButcherJoseph Asset Management, LLC (“BJAM”), are opinions and should not be construed as facts. The market commentary is for informational purposes only and should not be deemed as a solicitation to invest or increase investments in BJAM products or the products of BJAM affiliates. The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. There can be no guarantee that any of the described objectives can be achieved. BJAM does not undertake to advise you of any change in its opinions or the information contained in this report. Past performance is not a guarantee of future results. Information provided from third parties was obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness.
Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will be profitable. The price of any investment may rise or fall due to changes in the broad markets or changes in a company’s financial condition and may do so unpredictably. BJAM does not make any representation that any strategy will or is likely to achieve returns similar to those shown in any performance results that may be illustrated in this presentation. There is no assurance that a portfolio will achieve its investment objective.
Definitions and Indices
The S&P 500 Index is a stock market index based on the market capitalization of 500 leading companies publicly traded in the U.S. stock market, as determined by Standard & Poor’s.
UNLESS OTHERWISE NOTED, INDEX RETURNS REFLECT THE REINVESTMENT OF INCOME DIVIDENDS AND CAPITAL GAINS, IF ANY, BUT DO NOT REFLECT FEES, BROKERAGE COMMISSIONS OR OTHER EXPENSES OF INVESTING. INVESTORS CAN NOT MAKE DIRECT INVESTMENTS INTO ANY INDEX.
BJAM is an investment advisor registered in North Carolina and Arizona. Such registration does not imply a certain level of skill or training. BJAM’s advisory fee and risks are fully detailed in Part 2 of its Form ADV, available upon request.
Recommended Content
Editors’ Picks
EUR/USD under pressure near 1.0350 after mixed sentiment data
EUR/USD remains in the negative territory near 1.0350 in the European session on Tuesday, erasing a portion of Monday's gains. The pair is undermined by risk aversion and the US Dollar demand, fuelled by US President Trump's tariff threats, and mixed sentiment data.
GBP/USD drops to 1.2250 area on broad USD strength
GBP/USD stays under bearish pressure and trades deep in the red near 1.2250 on Tuesday as the USD gathers strength following US President Trump's tariff threats. The data from the UK showed that the ILO Unemployment Rate edged higher to 4.4% in the three months to November.
Gold price eases from over two-month top on stronger USD, positive risk tone
Gold price (XAU/USD) retreats slightly after touching its highest level since November 6 during the early European session on Tuesday and currently trades just below the $2,725 area, still up over 0.50% for the day.
Bitcoin fails to sustain the $109K mark after Trump’s inauguration
Bitcoin’s price steadies above the $102,000 mark on Tuesday after reaching a new all-time high of $109,588 the previous day. Santiment’s data shows that BTC prices quickly corrected, as social media showed major greed and FOMO among the traders in Bitcoin after President Donald Trump’s inauguration.
Five keys to trading Trump 2.0 with Gold, Stocks and the US Dollar Premium
"I have the best words" – one of Donald Trump's famous quotes represents one of the most significant shifts to trading during his time. Words from the president may have a more significant impact than economic data.
Trusted Broker Reviews for Smarter Trading
VERIFIED Discover in-depth reviews of reliable brokers. Compare features like spreads, leverage, and platforms. Find the perfect fit for your trading style, from CFDs to Forex pairs like EUR/USD and Gold.