Lew'da thought it: Debt Ceiling back on the agenda
US stocks finished mixed - DOW ends the day lower (IBM) while the S&P managed to end the day slightly higher as investors continued to react to the uneven earnings reports (COH, NFLX, AMD, EBAY) while contemplating what may come out of next week’s FOMC meeting. The FED is testing the anxiety level of the mkt by suggesting that a further $10 bil/month -( taking it to $20 bil/mo) will be withdrawn. Is the mkt really ready for further tightening or does it need to see more data?
It was only last month that they announced the beginning of withdrawal - we have not even had one solid month of data since....so while they are ringing the bell - I do not believe that further tightening is in the cards this month....The mini taper satisfied the urge to do something, but my sense is that any further tightening is premature - particularly given the news that Treasury Secretary Lew is also sounding the 'fire alarm'.......
Yesterday - Lew WARNS congress that the debt ceiling debate has NOT gone away...reminding them that the gov't will run out of money or as he put it - "exhaust its borrowing powers WITHOUT action by Congress":
"It would be best if Congress raises the $16.7 trillion debt limit by Feb. 7, If it doesn't, the Treasury Department could use "extraordinary measures" for a couple of weeks to finance the government, but it likely will "exhaust those measures in late February,"
Republicans gather 'round....which issues will you toy with this time in the ongoing saga of another debt ceiling fight? Will they stick their heels in the ground until the 11th hour yet again? Will the FED in fact announce more tightening in light of this commentary or will they settle in and see how it unfolds on the national stage?
Yesterday - the FED added some $2.8 bil to the system and remember - even though they are withdrawing QE at the rate of $10 bil/month - they can continue to 'adjust' policy with the use of REPO's and REVERSE REPOS.
(Repurchase Agreements (REPOS) is when the FED makes collateralized loans to the primary dealer banks - adding liquidity - and Reverse Repurchase Agreements is when the FED borrows money back from those same banks....essentially subtracting liquidity from the system - separate from the current QE policy objectives.)
That being said - there is no doubt that they will turn up the heat a little to test the reaction.....but in reality - I think they still painted themselves into a corner as the wild card remains - What will happen to rates? The spring housing 'selling season' is only weeks away - and the last thing they want to see right now is a spike in the mortgage mkt - my bet says that the FED will choose the path of least destruction.
All of this talk continues to play havoc with the gold mkt.....has gold found a floor?
In 2013 - we saw gold go from $1600/oz to $1250/oz and so far this year - it has remained in a tight range...testing $1200 and moving to $1260.... as it tries to stabilize.... but prices have since fallen back, driven by speculation I think that the Fed will continue to withdraw.....and this concern will continue to hang over gold. Trader type money does appear to be playing here - but is that due to the severe decline or is there something else brewing? What about the Chinese? Will they continue to be big buyers of the metal? Will they stand still at a price thus underpinning demand? This morning Gold is +$8 trading at $1246/oz remaining within the $1200/$1260 range.
Over in Davos - the conversations continue....interview after interview with global leaders - makes for interesting TV - but will that really impact how investors react? Today we will get earnings from Southwest Air, Janus Capital Group, Alaska Air, Lockheed Martin, Keycorp, Fifth Third Bancorp, MCD and more....
Eco data includes - Initial Jobless Claims exp of 330k, Cont Claims of 2.92mil, Markit Prelim PMI of 55, Existing Home sales of 4.93 mil (annualized) or + 0.6% m/m.
US futures are DOWN 8 pts this morning as we await today's data and continue to digest the recently released data points. Weakness in some industrial bellwethers (real economic indicators) continues to cause investors to be cautious as they contemplate the next FED move. I suspect that a test of 1825 is in the works and a breach of that will once again allow a test of 1810 (the 50 DMA) on the S&P.
This morning we see that the pressure is off of Jamie Dimon for a while as the focus shifts to Lloyd Blankfein (GS) as Libya is suing GS over significant losses suffered from 'soured trades' during the financial crisis...as they take this to court in London noting that :
"GS abused the relationship of trust and confidence with the sovereign wealth fund of the Libyan people..."
Amount in question? $1 bil +...so small change for Lloyd - but it is the negative publicity that he wants to avoid.
Next - a surge in NFLX in early trading (+16%) after they announced a 5 fold increase in profits - but just a side question - Is NFLX a company that really translates into signs of a 'stronger economy'. I mean - it's all good that they sign up new subscribers to watch TV - but how exactly does that help create jobs or stimulate growth in the economy?
It was only last month that they announced the beginning of withdrawal - we have not even had one solid month of data since....so while they are ringing the bell - I do not believe that further tightening is in the cards this month....The mini taper satisfied the urge to do something, but my sense is that any further tightening is premature - particularly given the news that Treasury Secretary Lew is also sounding the 'fire alarm'.......
Yesterday - Lew WARNS congress that the debt ceiling debate has NOT gone away...reminding them that the gov't will run out of money or as he put it - "exhaust its borrowing powers WITHOUT action by Congress":
"It would be best if Congress raises the $16.7 trillion debt limit by Feb. 7, If it doesn't, the Treasury Department could use "extraordinary measures" for a couple of weeks to finance the government, but it likely will "exhaust those measures in late February,"
Republicans gather 'round....which issues will you toy with this time in the ongoing saga of another debt ceiling fight? Will they stick their heels in the ground until the 11th hour yet again? Will the FED in fact announce more tightening in light of this commentary or will they settle in and see how it unfolds on the national stage?
Yesterday - the FED added some $2.8 bil to the system and remember - even though they are withdrawing QE at the rate of $10 bil/month - they can continue to 'adjust' policy with the use of REPO's and REVERSE REPOS.
(Repurchase Agreements (REPOS) is when the FED makes collateralized loans to the primary dealer banks - adding liquidity - and Reverse Repurchase Agreements is when the FED borrows money back from those same banks....essentially subtracting liquidity from the system - separate from the current QE policy objectives.)
That being said - there is no doubt that they will turn up the heat a little to test the reaction.....but in reality - I think they still painted themselves into a corner as the wild card remains - What will happen to rates? The spring housing 'selling season' is only weeks away - and the last thing they want to see right now is a spike in the mortgage mkt - my bet says that the FED will choose the path of least destruction.
All of this talk continues to play havoc with the gold mkt.....has gold found a floor?
In 2013 - we saw gold go from $1600/oz to $1250/oz and so far this year - it has remained in a tight range...testing $1200 and moving to $1260.... as it tries to stabilize.... but prices have since fallen back, driven by speculation I think that the Fed will continue to withdraw.....and this concern will continue to hang over gold. Trader type money does appear to be playing here - but is that due to the severe decline or is there something else brewing? What about the Chinese? Will they continue to be big buyers of the metal? Will they stand still at a price thus underpinning demand? This morning Gold is +$8 trading at $1246/oz remaining within the $1200/$1260 range.
Over in Davos - the conversations continue....interview after interview with global leaders - makes for interesting TV - but will that really impact how investors react? Today we will get earnings from Southwest Air, Janus Capital Group, Alaska Air, Lockheed Martin, Keycorp, Fifth Third Bancorp, MCD and more....
Eco data includes - Initial Jobless Claims exp of 330k, Cont Claims of 2.92mil, Markit Prelim PMI of 55, Existing Home sales of 4.93 mil (annualized) or + 0.6% m/m.
US futures are DOWN 8 pts this morning as we await today's data and continue to digest the recently released data points. Weakness in some industrial bellwethers (real economic indicators) continues to cause investors to be cautious as they contemplate the next FED move. I suspect that a test of 1825 is in the works and a breach of that will once again allow a test of 1810 (the 50 DMA) on the S&P.
This morning we see that the pressure is off of Jamie Dimon for a while as the focus shifts to Lloyd Blankfein (GS) as Libya is suing GS over significant losses suffered from 'soured trades' during the financial crisis...as they take this to court in London noting that :
"GS abused the relationship of trust and confidence with the sovereign wealth fund of the Libyan people..."
Amount in question? $1 bil +...so small change for Lloyd - but it is the negative publicity that he wants to avoid.
Next - a surge in NFLX in early trading (+16%) after they announced a 5 fold increase in profits - but just a side question - Is NFLX a company that really translates into signs of a 'stronger economy'. I mean - it's all good that they sign up new subscribers to watch TV - but how exactly does that help create jobs or stimulate growth in the economy?
Lemon Roasted Feta Chicken
Start with thighs and legs - I make some skinless and leave the skin on others so that I get some of the juice from the skin....but either way is fine...whatever you prefer.........take note:
Start with 6 pieces of chicken, 2 cloves crushed garlic, 1 lg sliced onion and 3 potatoes that you have either cubed, or quartered or sliced...whichever way you prefer works just fine....
Place chicken, garlic, onion and potatoes in a glass baking dish....season with S&P.
Preheat oven to 400 degrees.
Next whisk together: 1 cup of chicken broth, 1/8 cup of olive oil, about 1/4 cup fresh lemon juice and some dried oregano. Pour over the chicken, cover tightly and let marinate for 20 mins.
Place in oven and roast for about 30mins - then remove cover and roast for 20 more mins ....basting occasionally with the pan juices. Now turn on broiler and ...Broil the chicken on each side until nice and golden brown. Careful not to burn the potatoes.
After broiling - add crumbled feta cheese over the chicken and potatoes and return to the broiler for a couple of mins- just so the cheese softens really. Once completed serve on a warmed platter with Chicken in the center surrounded by the potatoes - serve juice on side. Enjoy this dish with a steamed green vegetable- like asparagus, or broccoli. Season with S&P and a dab of butter.
Start with 6 pieces of chicken, 2 cloves crushed garlic, 1 lg sliced onion and 3 potatoes that you have either cubed, or quartered or sliced...whichever way you prefer works just fine....
Place chicken, garlic, onion and potatoes in a glass baking dish....season with S&P.
Preheat oven to 400 degrees.
Next whisk together: 1 cup of chicken broth, 1/8 cup of olive oil, about 1/4 cup fresh lemon juice and some dried oregano. Pour over the chicken, cover tightly and let marinate for 20 mins.
Place in oven and roast for about 30mins - then remove cover and roast for 20 more mins ....basting occasionally with the pan juices. Now turn on broiler and ...Broil the chicken on each side until nice and golden brown. Careful not to burn the potatoes.
After broiling - add crumbled feta cheese over the chicken and potatoes and return to the broiler for a couple of mins- just so the cheese softens really. Once completed serve on a warmed platter with Chicken in the center surrounded by the potatoes - serve juice on side. Enjoy this dish with a steamed green vegetable- like asparagus, or broccoli. Season with S&P and a dab of butter.
No comments:
Post a Comment