Mint - Blain's Morning Porridge – September 11th 2017
September 11, 2017

"If we learn nothing else, we learn life is short and there is no time for hate."

For the avoidance of doubt – the Morning Porridge is market commentary, it is not investment advice…

Today is the anniversary of 9/11. Across the globe all BGC Mint trading commissions and profits will be donated to charities to remember our colleagues and friends lost on that terrible day.

However, we don't make it a sombre affair - Our offices will be full of celebrities just desperately keen to trade with you! If you fancy trading a few billion treasuries with a Strictly Come Dancing star, a couple of yards of yen with a premier league footballer, shoot the breeze on the euro with a leading actress, or buy a basket of exchange-traded funds from a paralympian.. let us know. Alternatively just call for prices and see who answers the phone… (it will probably be me… but you never know..) We might be working for free today, but we're working hard!

My stockpicking colleague Steve Previs has written a superb commentary this morning on where the stock market is going. I think it makes sense to share his thoughts from this morning with you all:

MARKET-TECHNICAL PICTURE

Friday was another one of those days when the market basically went nowhere. Therefore, as we have stated time and time again, when the market doesn't move, the technical picture doesn't change.

The conventional technical indicators remain mixed with fresh buy signals on the daily time frame and sell signals on the weekly time frame. Meanwhile, sentiment indicators remain as optimistic as ever.

While speaking about sentiment, we have received some push-back from readers who have questioned our comments about just how optimistic sentiment is. We can assure you, without a doubt, that it is very optimistic. The Gallup website shows that investor optimism is at a 17-year high. In fact, at 68 percent, optimism about the stock market is tied for the highest percentage on record!

Otherwise, in case you haven't noticed, the SPX remains firmly ensconced between 2400 and 2500 where it has been since late May. So it's going on four months that the market has been stuck in this range. We believe what we are experiencing is distribution. By that we mean strong hands are selling to weak hands. The strong hands represent the smart money while the weak hands represent the less informed money. We've seen this many times in the past. And believe us, the smart money usually comes out on top.

As we write, the December S&P 500 future contract is up 11.80 points indicating the bulls are raring to go. If the market stays at this level or higher going into the open in the new year we will likely see a big rally day.

This morning markets, and the insurance sector in particular, are taking a boost as we scale back hurricane fear.

One of the big questions I tried to answer last week was how to short catastrophe bonds. Facing Hurricane Irma, we concluded a substantial hit on the specialist funds that buy Cat bonds was likely. Although it's been a devastating storm, it does look like Florida has dodged a bullet as the storm weakens. That's a positive for Floridians and markets. 

It's even been heralded as a plus for Trump - the world's chief climate change denier got "lucky" according to one blog. Not sure I see how that actually matters… Weather is weather and Trump is Trump. Loathe him or loathe him, he's in office. He's likely to stay there no matter how few climate change experts he listens to. His electorate don't believe it either.

Writing about storm impact last week, I was struck by the amount of feedback from valued clients and friends telling me how wrong the climate change case is. Many Porridge readers simply don't buy global warming danger.

Are the right or wrong? It's certainly true there is a long-term history that points to fluctuations and volatility across climate measures as normal. Frost fairs and the mini-ice age in the 1400s are often cited: some say it triggered the Renaissance as colder Baltic waters spawned an explosion in herring numbers which allowed a formerly subsistence economy to become rich and question the status quo…

On the other hand, carbon in the atmosphere (measurable in artic ice cores) has risen dramatically, and it's easy to buy into the shock/awe story of a global environmental catastrophe of our own making.

As one of the few remaining soft/left bean bag socialists still in the City, it would be natural to assume I fully embrace climate change fears. Despite nodding my head in vigorous agreement with Al Gore's documentaries, I do have niggles, doubts and worries. I just don't know what is science fact and hype on both sides of the argument.

Moreover, I'm worried that if it's really a worst case scenario for planet – what are we going to do about it: ie this country will need ten new nuclear power stations if we switch to electricity which are taking 30-plus years to build and produce massively expensive ‘tricity!

So, I'm going out to watch some tapes and read some books. I'm going to educate myself on what's really going on. Might try to write something on it.

My gut feeling remains something is seriously wrong with the world, but I'd like to find out what.

On that happy note.. time to go do the day job!

Bill Blain

Head of Capital Markets/Alternative Assets

Mint Partners





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"If we learn nothing else, we learn life is short and there is no time for hate."

For the avoidance of doubt – the Morning Porridge is market commentary, it is not investment advice…

Today is the anniversary of 9/11. Across the globe all BGC Mint trading commissions and profits will be donated to charities to remember our colleagues and friends lost on that terrible day.

However, we don't make it a sombre affair - Our offices will be full of celebrities just desperately keen to trade with you! If you fancy trading a few billion treasuries with a Strictly Come Dancing star, a couple of yards of yen with a premier league footballer, shoot the breeze on the euro with a leading actress, or buy a basket of exchange-traded funds from a paralympian.. let us know. Alternatively just call for prices and see who answers the phone… (it will probably be me… but you never know..) We might be working for free today, but we're working hard!

My stockpicking colleague Steve Previs has written a superb commentary this morning on where the stock market is going. I think it makes sense to share his thoughts from this morning with you all:

MARKET-TECHNICAL PICTURE

Friday was another one of those days when the market basically went nowhere. Therefore, as we have stated time and time again, when the market doesn't move, the technical picture doesn't change.

The conventional technical indicators remain mixed with fresh buy signals on the daily time frame and sell signals on the weekly time frame. Meanwhile, sentiment indicators remain as optimistic as ever.

While speaking about sentiment, we have received some push-back from readers who have questioned our comments about just how optimistic sentiment is. We can assure you, without a doubt, that it is very optimistic. The Gallup website shows that investor optimism is at a 17-year high. In fact, at 68 percent, optimism about the stock market is tied for the highest percentage on record!

Otherwise, in case you haven't noticed, the SPX remains firmly ensconced between 2400 and 2500 where it has been since late May. So it's going on four months that the market has been stuck in this range. We believe what we are experiencing is distribution. By that we mean strong hands are selling to weak hands. The strong hands represent the smart money while the weak hands represent the less informed money. We've seen this many times in the past. And believe us, the smart money usually comes out on top.

As we write, the December S&P 500 future contract is up 11.80 points indicating the bulls are raring to go. If the market stays at this level or higher going into the open in the new year we will likely see a big rally day.

This morning markets, and the insurance sector in particular, are taking a boost as we scale back hurricane fear.

One of the big questions I tried to answer last week was how to short catastrophe bonds. Facing Hurricane Irma, we concluded a substantial hit on the specialist funds that buy Cat bonds was likely. Although it's been a devastating storm, it does look like Florida has dodged a bullet as the storm weakens. That's a positive for Floridians and markets. 

It's even been heralded as a plus for Trump - the world's chief climate change denier got "lucky" according to one blog. Not sure I see how that actually matters… Weather is weather and Trump is Trump. Loathe him or loathe him, he's in office. He's likely to stay there no matter how few climate change experts he listens to. His electorate don't believe it either.

Writing about storm impact last week, I was struck by the amount of feedback from valued clients and friends telling me how wrong the climate change case is. Many Porridge readers simply don't buy global warming danger.

Are the right or wrong? It's certainly true there is a long-term history that points to fluctuations and volatility across climate measures as normal. Frost fairs and the mini-ice age in the 1400s are often cited: some say it triggered the Renaissance as colder Baltic waters spawned an explosion in herring numbers which allowed a formerly subsistence economy to become rich and question the status quo…

On the other hand, carbon in the atmosphere (measurable in artic ice cores) has risen dramatically, and it's easy to buy into the shock/awe story of a global environmental catastrophe of our own making.

As one of the few remaining soft/left bean bag socialists still in the City, it would be natural to assume I fully embrace climate change fears. Despite nodding my head in vigorous agreement with Al Gore's documentaries, I do have niggles, doubts and worries. I just don't know what is science fact and hype on both sides of the argument.

Moreover, I'm worried that if it's really a worst case scenario for planet – what are we going to do about it: ie this country will need ten new nuclear power stations if we switch to electricity which are taking 30-plus years to build and produce massively expensive ‘tricity!

So, I'm going out to watch some tapes and read some books. I'm going to educate myself on what's really going on. Might try to write something on it.

My gut feeling remains something is seriously wrong with the world, but I'd like to find out what.

On that happy note.. time to go do the day job!

Bill Blain

Head of Capital Markets/Alternative Assets

Mint Partners



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