Hey folks! Yep, it's nighttime, but figured we would post today's Wake-Up Call. Catching up on posts after today's whirlwind day of meetings and media spots. The Bloomberg clip was awesome--will add to the blog shortly.
For now, here's the Wake-Up Call. Be sure to sign-up for your own free edition in a more timely manner--like when you're actually waking up. Just send an email to info@LandColtTrading.com with the word 'subscribe' in the subject line and we'll have you added so you can receive tomorrow's edition.
Thank you and enjoy...
Wall Street Traders Should Play Hooky Today
By: Kenneth Polcari, Expert Contributor
I pay $4.47 for regular, and the talk is that the price will move higher as we move into the spring/summer season. Will we hit a wall?
Stocks finished mixed at best – Greece fatigue to be sure. BTW, did you see some of the latest headlines? Greek gov't racing to meet the demands of the rescue package and these include but are not limited to: "sacking underperforming tax collectors" & "tightening the rules against bribery".
I mean - I burst out laughing on the train this morning! But no worries, all is good.
With the Dow 30 hitting a 9-month high and teasing Dow 13,000 – only to close off its highs as the day progressed; which really means nothing but which apparently means something to investors as they struggle with this milestone.
1. Does Dow 13,000 signal a turnaround in the economy?
2. Does Dow 13,000 mean that all is well?
3. Will Dow 13,000 cause a real shift in consumer attitudes?
The answer to these questions is – No, No, and Maybe. No because the rally is manufactured by the Fed and the stimulus they are pumping into the system. No because the data continues to be mixed and frustrating. (Are we moving in the right direction? Yes, but slowly). And Maybe, because as investors look at their qtrly IRA/401K/investment statements – they may feel a bit better about their portfolio’s but not enough that we will see a dramatic shift in mindset.
I mean think about it - are you going to change your spending habits because your 401K or IRA has increased in value? Does Dow 13k make you want to go out and buy a new house? I mean what are we talking about?
People should realize that the mkt is now up 17% since the Nov lows with no real pullback, so jumping ALL IN at Dow 13k does NOT make sense. Again, if you are investing for the long term - 5+ yrs. then you should not care about Dow 13k.
You should be on a regular investment schedule anyway.
If you are day trading then "I" would be selling at Dow 13k. If you are looking to buy a new car - who cares about Dow 13k? People will feel better when they are secure in their jobs, when the price of their house stabilizes, when the price of gas comes in, when they feel like the political dysfunction in DC is under control and that our elected officials are doing the right thing.
Look - last week Barron's ran with "Dow 15,000", and yesterday CNBC ran with "Dow 13,000 May Finally Lure Investors Back into Stocks". Why, I ask?
Joe Q Public has the tendency to do the wrong thing - it is like the "herd mentality"...the emotional tug of it all. "Greed and Fear" causes investors to do the wrong thing.
Again, a defined strategy and sticking to it will produce better results over the long term. Jumping in at 13k is NOT an investment strategy.
Yesterday - once again Apple led the way, stock up $12.73 a share, clearly boosting both the S&P and the NASDAQ 100 to new highs. This is both a blessing and a curse.
It is a blessing in that it has fueled the bull market and is certainly helping these indexes push to new highs, but a curse in that it continues to distort what is really happening to the vast majority of earnings.
Yes, it is confusing. Investors are torn. The S&P is up 8% for the year, YET earnings are deteriorating. Note this piece from Thomson Reuters:
"S&P 500 earnings performance has so far trailed recent quarters in terms of beating Wall Street's estimates. While that percentage has improved since the start of the earnings season, it's below the average beat rate for the past four quarters of 70%.”
Retailers are due to report this week and we may see some surprises due to the HEAVY discounting we witnessed last qtr to get people to part with their money. But do disappointing earnings really matter to the mkt?
Apparently not right now as the Fed has distorted the picture for all; and if gas and food continue to move up (things that really impact day to day life), and confidence is tested – what then?
Overnight in Asia - mkts mixed to slightly higher - Chinese PMI below 50 for a fourth straight month signaling continued weakness in manufacturing, and that they remain vulnerable to a weakening Europe.
News out that they are cutting bank reserve requirements to support the economy exports also fell to an 8 month low further news that the gov't is not optimistic about the outlook for trade: Japan +0.8%, Hang Seng - flat, Shanghai +0.7%, ASX – flat.
In Europe mkts are lower this morning as they remain "unimpressed" by the Greek deal and Euro zone PMI data disappoints, higher oil prices due to crisis in Iran - again signaling a weakening manufacturing environment. FTSE - 0.4%, DAX -1.08%, CAC 40 - 0.5%, Eurostoxx - 0.8%.
US Futures are down 3.5 trading at 1356 - again mkts churning assessing and re-assessing the timing and impact of a Greek default along with broader US data points.
Obama - puts forth a corp tax plan - with virtually no chance of survival. Republicans want more net tax cuts, companies want a deeper cut to the rate while they scream and yell about losing potential tax breaks.
Macroeconomic data points today include: existing home sales - exp of 1.1%, but this report is fraught with uncertainty from "seasonal adjustments". So basically, take it with a grain of salt. If it is a neg report the media will ignore; if positive then expect all of the bells and whistles as strategists call for the bottom of the housing mkt.
Look for 1340 to be support on the S&P - 1365 continues to be resistance. Dow Futures -24 pointing to a lower open.
Take good care.
I am going vegetarian today -as I have had a number of requests from some of my followers that "don't eat meat".......so try the:
Polenta with Kale and White Beans.....My wife and I came across this recipe some years ago when we found out that our daughter needed to be on a gluten free diet....this is easy to make and can be eaten as a meal or as a great side dish....the Kale mixed with the white beans on a bed of polenta is not only pleasing to the eye - but is pleasing to your taste buds.....
In a pan - sauté 1 med chopped onion and minced bacon in a bit of olive oil.....Rinse kale and break off the stem - coarsely chop the kale and add to the sauté pan with onion and bacon. Cover and reduce heat. In a second pot - bring 2 cans of cannelloni beans to a boil - using the liquid from the beans and a bit of water (just enough to cover the beans). Once they have boiled for 3 / 4 mins add the beans & water to the Kale and bacon/onion mixture and season with s&p. reduce heat to simmer.
Polenta - in a backing dish - add 4 cups of water, stir in 2 cups of polenta careful to not leave lumpy. Cut up 1/2 stick of butter and add to mixture. Cover and place in 350 degree oven for 20 mins. Remove (polenta should be almost formed yet still a little wet) - add shredded mozzarella and grated parmegiana cheese - mix and replace in oven for another 5 mins or so....you can tell when it is done when it has a absorbed all of the water and is the consistency of oatmeal.
Place the polenta on a plate and top with the kale and beans - serve immediately. This can be used as a main course or as an accompaniment. If you are not a Kale person - substitute fresh spinach.