RANDOM STUFF

While you are watching these impeachment hearings, just remember that those that are asking questions from both sides of the aisle are all culpable in taking us to $23 trillion of debt and $1 trillion yearly deficits. The first $500 billion of OUR tax dollars are going towards interest this year on all that debt they have created but don’t worry because economists say it is the percent of debt to GDP that matters. Yup!

Bet you haven’t heard much about the MILLIONAIRES SURTAX ACT. Last week, Maryland senator Chris Van Hollen and Virginia Congressman Don Beyer unveiled it. The bill puts an extra 10% tax on individual income above $1 million or $2 million for married couples. This tax would apply to all income, including long term capital gains. Right now, no chance of passing but important to remember where they will go if they gain full power. This is just a shot across the bow. Looks like $4.5 trillion of spending is just not enough.

For the past week, we have told you that all our sentiment indicators are bright red bullish. This usually leads to some downside corrective work because the masses were all in on a near-term basis. Keep in mind, this will not turn a bull into a bear but corrections serve to work off near term excitement and frothiness. Putting doubt back in the market is not a bad thing. We think there is a shot we are now getting some of that stalling action that could lead to some near-term weakness. Leading groups, FINANCIALS and SEMICONDUCTORS are quite extended and could use some pulling in. Again, we think any pullback at this juncture would be just that. But…

Keep in mind, Ben Bernanke, we mean Jay Powell, is providing more liquidity to the system than Bernanke did when we were at 9% unemployment and the economy was in the crapper. Of course, it is QE but not QE. This kind of liquidity has been great for markets both here and around the globe since the lows of 09. We laugh when we hear fedheads talk about sitting pat on lowering rates again when what they are doing is easy money on steroids.

With 90% of S&P companies reporting, earnings are down nearly 4% year over year but hey, a good percentage of companies beat the number. We are seeing a good number of companies see their stock skyrocket even though earnings, sales and future guidance is down. CATERPILLAR (CAT) looks to be a good poster child on this.
Go look up what the new district attorney of San Francisco, Chesa Boudin is doing for that great city. Actually, doing TO that great city.
BEYOND MEAT (BYND)…Remember what we told you when it had a larger market cap than Conagra (CAG) even though Conagra owns a ton of major brands, does a ton more sales and actually makes a ton of money. Beyond Meat loses money. The stock has now dropped from a high of  $240 TO $78 AND still has a $4.8 billion market cap.
The Knicks…ok stop. The Giants…ok stop.
The 17th Annual Kaltbaum Family Blessings Banquet will be held Wednesday November 20th here in Orlando, Fla. We will be serving 400 great kids from the Boys and Girl’s Clubs of Central Florida a great Thanksgiving dinner. Through the years, over 5,000 meals have been served. World renowned magician Kostya Kimlet and others will be performing. If you would like to volunteer, email us at gkaltbaum@kaltbaum.net.

PRE MARKET

Veterans Day today. Remember why we celebrate.

Futures are down. That’s not supposed to happen. Aren’t markets supposed to go straight up?  Just a few things we have told you in the past week and an update:

Just about all our sentiment indicators have hit bright red bullish. These are contrary indicators so bullish is bearish. Keep in mind, sentiment is a secondary indicator. Price is primary. But when sentiment hits extreme levels on either the bull or bear side, we make note of it. We have seen it in the low VIX. We have seen it in the put/calls with very heavy call buying. We have seen it in the rhetoric. We have seen it in many other things we follow. Also, keep in mind, sentiment is not a pinpoint indicator. There is usually some lag time. This also does not mean markets just go bearish from bullish. In bull markets, it just leads to some corrective work. Today’s open may or may not be that time.

Value in…growth still out. A bunch of lower beta value has broken out in sectors like CONSTRUCTION, CHEMICALS, MATERIALS and plain old “STUFF!” Many have earnings and sales that are down calling into question longevity. Growth still not happening.

Speaking of earnings, we take issue with anyone saying earnings are strong. With about 90% of S&P stocks reporting, earnings are down approximately 3% year over year.

Since the Fed started to specifically target the fed funds rate way back in 1982, it had never cut rates with the unemployment rate below 4%. On top of Powell lowering rates, he is now printing more money on a yearly run rate than Bernanke did when unemployment was at 9% and we were still in meltdown mode. The fed balance sheet is back above $4 trillion with a run rate of over $1.5 trillion. But remember, it’s not QE.  And remember, the recent low coincided with Powell’s MASSIVE, absolutely MASSIVE liquidity injections. The market has not missed a beat since.

BONDS remain below the 50 day average as yields tick up. This has caused most INTEREST-RATE sensitive stuff to also break, namely UTILITIES and REITS. You can also add in HOUSING coming under distribution. Other areas not helping are GOLD/SILVER, many CONSUMER STAPLES and other DEFENSIVE stuff, AEROSPACE/DEFENSE and a few other areas so split tape it remains. The players are just different.

 

MARKETS/CHINA/WARREN

——The 2nd part of our equation is coming to fruition. The first part is a maniacally easier money Jay Powell who is printing more cake than Bernanke did when unemployment was 9% and in the midst of a financial meltdown. Remember, markets love QE, which is not only occurring here but around the globe. And by the way, the 10 year is back to 1.893% so Mr. Easy may have overshot but this time, the other way.———–
———–But the 2nd part is now in full bloom as we are hearing this morning something about the tariffs being not so wonderful as the talk of loosening up on the tariffs hits the news. In our last missive to you, we wrote: ” The president finally took advice from a few smart people that he had to end the China nonsense as he heads into the election year. (Expect a truce sold as the greatest deal ever!)” And truce we are getting. Rolling back tariffs is not a deal. But it helps. Buying up the same amount of ag that you used to buy is not a deal. But it helps. We shall see what is next but we will take any “good news” as ELECTIONS MATTER. The president now understands this.———
——-So as we are now in the seasonally strong November-December period, the only negative is that near-term, all our sentiment indicators are bright red bullish. This is a contrary indicator so maybe we get some pulling back. But so far, pullbacks are nominal and short-lived. We also add that it will continue to remain a narrow market but this time it is growth that is not working while value is.——–
——-Of course, all this will not help the Knicks, will not help the Giants and we shall see about the Mets but they passed up a couple of really good coaches for a new guy who all we think about are the words “struck out looking!” Die hard Mets fans will know what we are talking about.———-
——–And lastly, we have held off on our take on this whole Elizabeth Warren Marxist nightmare. (Capitalist our —!) Seems many are now getting it as she just forgot the one rule of Marxists…never tell anyone your SPECIFIC plan. But many still miss the main point and that is nothing she tries to do will affect the wealthy but everything she does try to do will stop anyone and everyone from becoming wealthy. We will have the numbers and the facts in a few days. But in a nutshell…Elizabeth Warren=SPAM. Bill Gates= chateubriand. We have nothing against SPAM. Just thought the comparison appropriate.——

BEYOND MEAT NOT SO BEYOND

SOURCE: https://www.wsj.com/articles/plant-based-meat-is-all-hat-and-no-cattle-11572997943?shareToken=st447f71c58fa742a79e8a27f61ba92f29