Our New Website Is Here!
As part of our merger with St. Paul Research, we’ve created a new website that will house all of our collective content under one roof, bringing you a higher level of research and service through our analysts’ combined insight, expertise, and perspective. Go to my.stpaulresearch.com to access our new site.

Thank God For Boeing

Front page of the WSJ:

“Google’s Project Nightingale Gathers Personal Health Data (names, d/o/b, phone numbers, history, claims, treatments) on Millions of Americans.” 

This is a must read by everyone. They have AMASSED health records from Ascension facilities in 21 states – PATIENTS NOT YET INFORMED.

As expected, the markets came under pressure as the sun rose over the Atlantic. Futures had been pointing lower and with global markets under pressure. It made some sense that the negative tone would wash over the US and with the Veteran’s day holiday yesterday. With banks and the bond market closed, it was sure to be a quiet day and it was (for the most part). Stocks opened lower and then…

Thank God for Boeing (BA). After news hit the tape at 11:40 am that Boeing was preparing to deliver new 737 Max’s  before the end of 2019 — whether or not the FAA has approved pilot training — the DOW went from negative to positive (BA is a DOW component) as the excitement over the return of this aircraft sent the algos into a frenzy. The Dow, which is a price weighted index, got a shot in the arm as BA rose more than $16 or 4.5% to $366/share, adding 108 points to the index value. That took it into positive territory as the afternoon progressed. By the end of the day, the Dow eked out a gain of 10 points while the S&P lost 6 points, the Nasdaq lost 11 points, and the Russell advanced by 5 points.

Now while the Dow did advance, the broader market, represented by the S&P 500, the “tech” market represented by the Nasdaq, and the US-centric small/midcap market (SMID) represented by the Russell, still suggests that the lingering US/China trade war, unrest in Hong Kong, concerns over political drama across Europe, and in the US and mixed macro data remain topics of conversation among the investing class. With the strong rallies seen across the globe in the last two months, many analysts are now suggesting that we might be a bit “overbought” on a short term basis. They’re saying a pullback that allows for proper digestion of the data is appropriate before the market can really consider moving ahead and breaking out (again) on a longer term basis. I mean look, over the past month alone, the Dow is up 3%, the S&P is up 4%, the Nasdaq is up 5% and the Russell is up 8%. And for the year?  +18%, +23%, +27%, and +21% respectively.

Global markets are up solidly as well in the last month alone. Global investors appeared to be “ok” with the “state of the unions” no matter all of the talk of that “slowdown” which has yet to raise its head. Yeah, ok. You say that some macro data suggests a slowdown blah, blah, blah… but where is it? Manufacturing? Oil demand? Job Growth? CPI? PPI? PMIs? Look, third quarter earnings season was solid, no disasters. 78% of reports beat estimates, forward guidance was strong, Phase One of the trade deal is all but done (we think), and talk of tariff recalls are all the rage (although Donny has poured cold water on that). As noted, US indexes are at all-time highs while global markets are marching higher as well. In the last month alone, Japan is up 9%, Hong Kong is up 6%, China is up 4%, ASX +4%, France is up 8%, Germany is up 10%, Eurostoxx is up 8%, Spain is up 6%, Italy is ahead by 10%, and even the Russians are ahead by 10.5%! (Surely Trump must have something to do with that, must be an impeachable offense somehow). For the year those same markets are +18%, +5%, +27%, +16%, +20%, +23%, +18%, +23%, +14%, and +27%. So, Not so bad. This is all while the global economy is supposedly sick. Yeah, I get it, global central banks have created this action, but no one seems to want “free markets” to trade freely so this is what we get. Clearly the fear here is what happens when they pull the rug out? (That’s a story for another day…)

This morning, the WSJ also runs with a story today about:

“Selloff in Complex Investments Flashes Warning for Junk Bonds”

Known as CLO’s (Collaterized Loan Obligations), these investments resemble the “mortgage backed bonds” that IMPLODED in 2008. Now I’m not screaming FIRE in a crowded theater. I’m just saying that there are simmering concerns in the credit markets that can affect the equity markets, like they did during the GFC (Great Financial Crisis).

But, global consumers do not appear to be concerned, as evidenced yesterday by the 11/11 Chinese singles “shopping day,” hosted by Alibaba (BABA). Let the record show that the WSJ runs with this headline and story:

“Alibaba Racks Up RECORD Sales on World’s Biggest Shopping Day – China’s singles day festival has turned November 11th into a retail EXTRAVAGANZA; Alibaba alone sold more than $38 billion in goods on Monday” (Now it’s considered a Festival?)

($38 Billion was up 23% over last years $30.8 billion, seems to me that no one is China appears to be concerned about a slowing economy or a trade war, just sayin’)

This morning, markets around the world are all green. Everyone is awaiting the latest developments in the US/China trade war. The WH announced (overnight) that Trump would delay the EU auto tariffs in what is the US/EU trade dispute, a dispute that has the ability to damage trade with yet another trading partner. This news is helping the mood around the world, as some speculate that news about China is not far behind.

US futures are UP small – Dow futures +17 points, S&Ps +3 points, Nasdaq +11points and the Russell is +4 points.

Donny is in NYC today and is set to speak at the Economic Club of NY, where he “could” give new clues about what he is thinking. (I wonder if all cell phones need to be turned in, so that no one can send a message to their high-speed computers to take advantage of any info gleaned from this speech). He is set to speak at noon. SO, keep your eyes on the S&Ps around lunchtime to see how it reacts. Just sayin’…

We remain in the 3050/3100 range on the S&P and I suspect that we will remain there until we get more clarity on trade. Yes, the headlines will cause surges and pullbacks, but it’s the STORY that will cause the next long term move. Stay tuned.

Gold continues to move lower and is now trading at $1,454/oz. Recall that two weeks ago, when Gold was testing support at $1500, I suggested that if we move ahead on trade. Then, Gold would back off and test $1,450/oz. I guess the gold market is assuming that a trade deal is all but done. If that is the case, then we could see gold trade down to long term support at $1,400/oz.

Take good care.

Kp


Spaghetti w/Butternut Squash Sauce

Spaghetti w/Butternut Squash Sauce

This is also a great starter dish for Thanksgiving:

Start with cubed butternut squash – place 2/3 of it in a pot of chicken stock, some crushed garlic, & a stick of butter – careful not to add salt as the stock will be salty enough. Add enough stock to cover the squash (as this becomes the sauce for the pasta). You want the squash bathing in the liquid – not swimming in it. Boil until the squash is soft – when done – use a masher (or one of those handheld puree utensils) to mash the squash… should be nice and thick – add the remaining 1/3 of squash and simmer for 15/20 mins…making sure that the new cubed pieces have time to cook and soften… this way – you get a thick sauce with chunks of squash for the pasta… Turn the heat off and add a handful of shredded parmegiana cheese and mix well.

In a separate pot – bring a pot of salted water to a rolling boil…add the pasta and bring to a boil for 8 /10 mins or until al dente. Strain pasta – always reserving a mugful of the pasta water to re-moisten the pasta… return to pot – add back a bit of the water and stir… do not make it watery – just a bit moist… now mix with the butternut squash – Serve immediately in warmed bowls and garnish with a bit more of the Parmegiana. always supplying additional cheese for your guests if they so desire.

Buon Appetito.

You May Also Be Interested In:

Mutant Strains, But No Overreaction – Try the Candied Pecans

What a difference a day makes! US futures are holding steady this morning not suggesting any sense of unease or panic over the latest mutant version of Covid-19. Flashback to yesterday morning – when the news out of Europe – more specifically from the UK – about a new mutant variation of Covid-19 hitting the countryside sent European stocks careening and US futures lower in pre-mkt trading.

Kenny Polcari

Kenny is the editor of Morning Thoughts and has been with Seven Figure Publishing since 2019.

Kenny is a CNBC exclusive contributor appearing on shows like The Halftime Report, Power Lunch, and Closing Bell. His market commentary has reached audiences across the nation on media outlets such as Bloomberg, Fox, ABC, and more.

Kenny’s...

View More By Kenny Polcari