Morning Thoughts / Quinoa with Mushrooms & Roasted Cauliflower July 31, 2012

“Strangers in the night – exchanging glances,  Wondering in the night, What were the chances, We’d be sharing love, Before the night was through…..Something in your eyes was so inviting” ……well you know the rest and that is exactly how it felt yesterday in the mkts……  …Stocks did nothing – as they await any news at all from the “two lonely people” (Cousin Mario and Uncle Benny) …..mkts were left to wait thus remained unchanged yesterday  – holding on to all of the gains seen last week, as traders waited  patiently to see if the ECB and the Fed  were just “a warm embracing dance away”..….  Will they live up to last week’s hype and expectations or will they disappoint?  . While the Eurozone continued to celebrate the commitment to ECB “euro printing”, the US markets did very little as they wait – a bit nervously – to see what actually comes out of the official ECB and FOMC this week. Clearly, all eyes and ears are keenly focused on what will come out of these two central banks this week,- in fact – mkts were so focused that they completely ignored another US macro data report disaster……yes folks – remember those regional manf reports we spoke about last week?  How all of them have missed the mark – with the exception of Kansas City – well add another one to the list of regions that are biting the dust.  The Dallas Federal Reserve monthly manufacturing survey, dropped sharply into negative territory, coming in at -13.2 versus expectations of + 2.5 and a previous reading of 15.5 last month. This does not feel good – although is consistent with the other slowing regional reports…..This should have added more fuel to the fire – as “bad news is good news” logic takes hold – yet it signals the fact that traders only care about the coming announcements from the central banks and what they intend to do……. Speculation running rampant – what will Uncle Benny do? What will Cousin Mario do?  Jawboning can only go so far – so it is time to put up or shut up – has all of this talk just managed to kick the can further down the road?  Last week it was all signed, sealed and delivered….this morning – chatter is that the Fed will do nothing until September – maybe using the Jackson Hole Summit as the platform to make a really big splash?  Does the Fed really have the tools available? 3 programs later and growth in the US has come to a grinding halt, yields on 10 yr treasuries are at all time lows, the economy remains sluggish and banks do not want to lend…..(growth in Europe no better) thus leaving one to wonder – Are the problems in the US (and Europe) too big for central banks to fix?  Yes….but what do I know….. So the rally has caused a marked shift in sentiment….analysts and strategists take to the airwaves to sing the praises of a “resilient” mkt and how we are climbing the wall of worry.  Recent mkt action is saying that the negatives are not as bad as perception – that slowing earnings, slowing revenues and the cautious forward guidance is nothing to worry about….ok…so if that’s the case – why do we spend so much time dissecting and anticipating these very metrics?  Why do these same people offer opinions in the moment and then change their tune when the central banks “artificially prop up the mkts”? Commodity markets are sounding the warning bell…..corn is up 50% over the last six weeks and soybeans are up 20%. Other wheat and grains commodities are beginning to move higher too.  A big enough QE program to rally equities will also drive crude oil back above $100 causing gas to move once again into the $4-$5 /gallon range.  If Benny does nothing on Wed – then the mkts will sell off, commodities should also sell off (for now) but his would give him sufficient cover for the “big launch” – Live from Jackson Hole!   – just like he did in the summer of 2010…causing a strong mkt reaction over the next two months. Today we will get the Chicago Purchase Managers Index, the Case-Shiller housing report and the Conference Board’s Consumer Confidence Index. Expect the mkts to ignore these as well. Nothing means anything until the central banks have their say. The Fed meets today and tomorrow with Wednesday the day for their policy statement.  The ECB meets on Thursday.  After this we get the non-farms payroll report on Friday. On a side note – there is a great article in the WSJ today – front page (bottom)  “Regulators Target Day Trading Firm”  – an excellent read on how mkt structure changes have allowed for the proliferation of parasitic automated HFT’s  to bastardize US capital mkts and destroy long term investor confidence.  Maybe the SEC and Congressional leaders should read it?  Any thoughts? US futures are now +3…trending at 1383….again 1350/1390 the range for now – at least until we hear from the banks.  Any sense that they will shoot the bazooka will cause a rally to the 1425 range for now…..any sense that they are still working on a plan with no direction will cause money to come off the table… If you are a long term investor – hold on….prices coming your way. Take Good Care KP Quinoa w/Mushrooms and Roasted Cauliflower Quinoa Salad with Mushrooms and Roasted Cauliflower – this is a great vegetarian dish or a great side dish to serve at any summer BBQ.  It is all about the healthy grain – great for anyone that suffers from Celiac disease – while also being good for you.  For this you need: Cooked Quinoa, florets of cauliflower (which you have seasoned with fresh garlic, s&p, an olive oil and roasted in the oven for 20 mins at 450 degrees) 1 can of Cecci (garbanzo) Beans, Mushrooms, Trimmed & Chopped 3 or so minced garlic cloves, Olive Oil, Fresh Parsley, Scallions – chopped, Celery – diced, s&p. Remove the cauliflower from the oven and set aside. Drain and rinse the Cecci.  Now toss the beans with two teaspoons of the olive oil, s&p, place on a baking sheet and roast in the over for 15 minutes or just  until they begin to brown. In a frying pan, add olive oil and cook the mushrooms until tender – until they lose their water.  add the garlic, and cook until you can smell the goodness – 10 mins….set aside. In a large bowl, toss the quinoa, cauliflower, cecci beans, mushrooms, parsley, celery, and green onions. In a small bowl, whisk together some balsamic vinegar, olive oil and s&p. Add to the quinoa salad and mix well.  Taste, and adjust.  You can add toasted walnuts or hazelnuts or even almonds at the end if you like. Enjoy.
Kenny PolcariMorning Thoughts / Quinoa with Mushrooms & Roasted Cauliflower July 31, 2012