Things you need to know.
- Stocks ended Monday in the RED column! Can you believe that?
- Bitcoin’s weekend collapse – 13%, spooking investors gave them a reason to hit the sell button. COIN loses 2%
- TESLA’s Bitcoin stash PLUS the self-driving car crash that killed two men sent the stock reeling – 6% by 10 am…before ending the day down 3%
- Cathie Wood’s ARKK had a tough day – down 3%
- BUT – Earnings continue to impress – KO, HOG, PLD, IBM & CCK all beating on both the top and bottom. UAL Missed – Hello??? Remember Thursday? DAL?
- Try the Grouper in Brown Butter Sauce
Oh boy…. stocks went down! Wow! Wait – are we sure? Was there a mistake? No, there was not…. look – all those numbers are RED…. The Dow down 123 pts or 0.36%, the S&Ps off 22 pts or 0.53%, the Nasdaq down 137 pts or 0.98%, the Russell off by 30 pts or 1.36% and the Transports gave back 120 pts or 0.81%
You can credit the weakness in Bitcoin and Ethereum – for reasons still really unknown – but for a range of reasons we could all come up with……for the weakness in the markets as they collapsed under the weight of themselves over the weekend that lit the fuse on stocks yesterday….and what do I mean….well, it’s fairly simple…..Markets and stocks have climbed to new heights…all of the great data reflected in prices…essentially – stocks were priced to perfection……Then recall what I said last week and again yesterday……
“With all of the good news essentially priced into the markets – we have to hope that we don’t get hit upside the head by a fly ball…. because if we do – then expect a swift negative reaction……”
Now while we can argue that yesterday’s weakness was far from a swift negative reaction – but it could be the beginning of a more focused retracement….
That collapse in crypto’s caused a range of emotions and actions…some clearly spooked enough to want out, while others welcomed the sale….so the buyers allowed that to happen choosing not to stand in front of moving freight train seeing how panicky the sellers would become….and that angst spilled over into the futures markets in the early pre-dawn hours….and then guess what???
News of the TESLA car crash hit the tape…..But this was a story unto itself…you see – two buddies got in a self-driving TESLA telling their wives that they were going out for a ride – while letting the computers do the driving…so this is the first mistake -because neither man got behind the wheel….One sat in the passenger seat and the other one sat in the rear seat – as if they were ‘passengers’ in an UBER…..and it was all good until it wasn’t. Apparently, the car took a sharp turn and the computer lost control sending the car careening into a big tree – and when the car smashed into the tree it exploded and burned for 4 hours…. the men -well – let us not go there… which leaves you to ask – what were they thinking? Oh, there are so many ways to answer that …. but the black box is sure to detail exactly what the men did not do, vs. what the car did do, and Lonnie is front and center making sure to place the blame everywhere BUT TESLA….and then add in the $2 bil worth of Bitcoin that Tesla has in the bank, which was now only worth $1.6, and it added to the negative headline.
And Cathie Woods’s ARKK ETF got slammed as well – as Bitcoin, COIN, TSLA, ZOOM, TELADOC, SQUARE, ROKU, ZILLOW, SPOTIFY, SHOPIFY etc.…all took it on the chin….…. causing her ETF to fall another 3% on top of the 1.77% it fell on Friday…. failing to crack the $130 resistance trendline that I thought it might crack (and I still do, just not today…) It closed last night at $120.44 and will hopefully find support right here…. all while understanding that the longer-term support for her right now is at $111…. 7% lower from where it closed.
And all of this was just enough to cause the buyers to sit back…. the small and mid-caps taking it the hardest – note that the Russell lost 1.36% even more than the Nasdaq which gave back 1%. The 10 yr. yield rose to 1.599% and that is up from Friday’s close of 1.51% – and while it is not 2% – the rise only re-ignited the potential inflation story – as the dollar declined and copper surged to a 7 yr. high as demand is expected to surge even more after the latest read on New Housing Starts last week exploded higher…. more houses mean more copper wire, more copper piping, more copper roofing, more copper gutters – are you seeing the theme – its MORE COPPER….and copper is up 108% since March 2020 and is up 22% since January 2021. And we haven’t even discussed roofing, wallboard, flooring, siding, concrete, compound, plywood, lumber, sockets, drains, lighting, toilets, appliances, HVAC – all things considered housing ‘infrastructure’ which are all soaring in price as well, notice it does not include carpeting, wallpaper, paint, pots and pans, plates and glasses, furniture, sheets and pillow cases, soap, toothpaste and tooth brushes, silverware and pictures none of which would be considered infrastructure by any stretch of the imagination…..Agreed? (I am asking for a friend).
And so, 2 more bells rang – one at 9:30 and then one at 4:00 pm.
This morning US futures are confused – well it is April 20th…..or 420 if written in number form….and that alone suggests that there may be a lot of people smoking pot today….as it is almost a national holiday….….Dow futures are off 35 pts, while the S&P:’s are flat, the Nasdaq is up 22 and the Russell is struggling to figure out what to do. There is not eco data to report today but there is a big ‘Apple Reveal’ …… – so the focus will be front and center on Apple and its new product lineup…. Expect new iPads, new Air pods, new Air tags along with a range of other improvements to a host of products. The show – begins at 10 am PST or 1 pm EST and will be completely live streamed from Apple Park in Cupertino, CA as any in real life events remain off limits…. Remember – if you are busy – just ask Siri – “Hey Siri – when is the next Apple event” and she/he will make you aware of all the event info and link you to Apple.com. YTD – Apple is only up 2.8% after being up 80% in 2020.
Additionally, the focus will also include earnings and speculation about what is next…. what is next in terms of tax policy, infrastructure policy, FED policy etc.….
Earnings today include such stalwarts as JNJ, LMT, SI, OMC, PM, PG, ABT all before the bell…while NFLX is the biggie after the bell…. all very exciting…
Asian stocks ended the day lower…. Japan losing 2%, Hong Kong up 0.1%, China off 0.07% and the ASX down 0.68%. The PBoC (Peoples Bank of China) kept the 1 yr. lending rate unchanged at 3.85% and this was NOT a surprise.
European markets are all down across the board….UK unemployment fell to 4.9% which should be viewed as a positive considering the complete national lockdown over the past 3 months. Nothing other to report on the eco front so the focus is on earnings… as of 5:30 am FTSE -0.59%, CAC 40 -1.02%, DAX -0.39%, EUROSTOXX -0.72%, SPAIN -1.46% and ITALY -0.86%.
Oil – is up 66 cts at $64.04. The dollar weakness adding to the surge higher…. which you can also credit to the whole move higher in the commodity complex…. We are still well within the $60/$65 range…. with building upward pressure and if the dollar continues to weaken then $70/barrel could be next.
Bitcoin is trading at $55k and Ethereum is trading at $2250…. Doggy Coin is trading at 40 cts and the Reddit crowd trying to push it up and thru $1….and you know this will end badly – so anyone who bought it at 10 cts or 15 cts…you should think twice about going long more and take your profits before you cannot. But hey – what do I know?
The S&P closed at 4163…. After trading as high at 4180 and as low as 4150…. Recall, the trendline is now well into unchartered territory – and I pointed out last week that we could make an argument for S&P 4400. And while I believe that is still a reasonable argument, I also believe that there are some short-term potholes…. that need to be navigated…. but no worries, because this a long game – it is all about the plan. The channel now is 3950/4400 – anything in between is considered well within the normal range….so do not panic if we have a pullback…. use it to your advantage.
Remember – stay focused….do not get caught up in the hysteria of it all…. take the time to trim a bit in names that have clearly outperformed or if you do not want to do that – then just add money to those sectors or names that have underperformed….
Text INVEST to 21000 to get my digital business card – give me a call if you want to discuss what I can do for you. You can now get a video version of this note on my IG (Instagram) feed – my handle is Kennyp1961 (https://www.instagram.com/kennyp1961/)
Take Good Care
Chief Market Strategist, Consultant
kpolcari@slatestone.com
Pan Seared Grouper in a Brown Butter Sauce
For this you need: 4 – 6 oz grouper filets, s&p, Olive oil, butter, Balsamic Vinegar, fresh squeezed lemon juice and minced shallot.
Preheat oven to 425 degrees.
Next – rinse the filets and then pat them dry with a paper towel. Let them stand for 15 mins and then season with s&p.
In a large ovenproof skillet – heat the olive oil over med hi heat. Place the fillets in the hot oil – top side down – skin side up. Cook for 3 mins – now – remove the skillet from the stove and place in the oven. Bake for another 4 mins – fish should be opaque by now. Remove the skillet from the oven – remove fish and place ‘seared side up’ (skin side down) on the individual plates.
Wipe the skillet clean – now add in about ½ stick of butter and heat it up until it begins to turn golden brown. Remove from heat and pour into a bowl. Next whisk in 1 tblspn of balsamic vinegar, 1 tsp fresh lemon juice and 1 tblspn minced shallots.
Spoon the sauce over each piece of fish. Serve with steamed green beans – seasoned with s&p and a dollop of butter.
Buon Appetito.
