CHK Denies Rumors/ Bill Clinton Style

*MARKETS REMAIN IN TURMOIL -

US FUTURES are lower again this morning....down 6 pts at 6 AM - after a tough day yesterday.......European mkts are struggling to hang on, Italian banks getting slaughtered - after having lost a combined value of $45 bil this year as concerns rise over 'unprovisioned loans' potentially impairing the solvency of their banking system... a spike in CDS spreads almost becomes a self fulfilling prophecy to their very solvency as counterparty risk grows........ Japan plummets 5.5% overnight - analysts and traders blame the dollar/yen trade and the Japanese Finance minister - Taro Aso - commented on the Yen's move - calling it 'rough'. Investors flocked into the 10yr Japanese gov't bond as the safety trade - NO MATTER that yields have gone negative. The rest of Asia remains closed for the Lunar new year - the fear is building about what will happen when those mkts re-open beginning tomorrow....stay tuned....

FLASHBACK......Stocks around the world traded sharply lower on Monday; crude oil fell again (but held above the January lows); rumors of imminent bankruptcy sent CHK (Chesapeake Energy) into a free fall losing about 50% of its value - and when they DENIED any rumor of bankruptcy - the selling only intensified as holders now assume the worst......(remember the famous Bill Clinton line: "I did not have sex with that woman..." - How'd that turn out? )

Carl Icahn, State Street, Vanguard, Blackrock, all suffering losses in the millions of dollars in this latest debacle as they are some of the biggest holders of CHK.

Exposure of the banking industry to the energy space coupled with lower margins, slowing global growth, confusing and threatening language from the both Sanders and Clinton; ; Continued liquidation by large sovereign wealth funds; Lack of clarity from the FED - and the upcoming Humphrey Hawkins Testimony; Negative interest rates around the world scream DESPERATION and now that threat sits on our doorstep; disruptive geo-political issues – think North Korea and their missile launch over the weekend; all caused investors to hit the SELL button across all sectors.... financials got clobbered – CNN reports that:

“Shares in some of the world's biggest banks are plunging. Financial stocks in the S&P 500 are down more than 11% so far this year. That's worse than oil, energy stocks, and even the emerging markets index. European banks have fallen even further. Deutsche Bank (DB) has lost 31% so far this year, Unicredit (UNCFF) is down 35%, and Credit Suisse (CS) is 30% down. Barclays (BCLYF), BNP Paribas (BNPQF), Societe General (SCGLF), and UBS (UBS) have all lost about 20% since the beginning of 2016.”

And the winners are? Gold and Treasuries! Gold rocketed $40 higher – breaking $1200/oz as it goes parabolic….just look at the chart - Gold is up 15% off the December/January lows….Now Gold does appear to be a bit overbought - but as long as the fear trade continues - then expect Gold to move higher. And Treasuries benefitted from the flight to quality and safety.

European stocks are trying to stabilize - Policy makers are trying to calm the mkts - ECB board member Benoit Coeure - reassuring investors that further stimulus is possible. With global volatility rising - some investors become more fearful which causes them to raise more cash - which means SELL more stocks - BUYERS know this - and so they wait......

Now while it was a tough day yesterday - we are still not seeing the PANIC trade - or complete capitulation in the broader mkt just yet.....Yesterday - after failing to hold the 1850 level - the S&P did trade to 1828 - just pts above the January lows......as it found some level of support - rallying back to finish the day off the worst levels. But this morning futures continue to convulse - now down 11 pts at 1841 - expect another test of the lows.....and like I said yesterday - if we fail to hold at 1820 - then strap in - because a move to the February 2014 lows of 1750 is in sight.

Earnings today include: Coca Cola (KO), Viacom(VIAB) Goodyear (GT) CVS and Wyndham Hotels (WYN) and Disney (DIS).

Tomorrow begins the Yellen Semi-annual testimony to congress - expect all ears to be tuned in - as Janet takes center stage in the middle of the storm.....

Orrechiette w/Roasted Cauliflower and Sweet Sausage

Another simple yet delicious dish that you can make in about 45 mins.

For this you need: Chopped Garlic, cauliflower, onions, sweet sausage, s&p, olive oil, Fresh grated Parmegiana and the Orrechiette (little ear shaped pasta).

Preheat the oven to 450 degrees.

Toss the cauliflower in a bowl with fresh chopped garlic, olive oil and s&p. (just enough olive oil to coat - do not drown it) Spread out the cauliflower on a cookie sheet and roast in the oven for about 30/40 mins. You want it to just begin to turn golden in color. Remove and set aside.

While this is happening - in a large sauté pan - add some oil, more chopped garlic and sliced onions...sauté until soft and translucent. Now add in the sausage meat - (remove it from the casing) and brown nicely. Season with s&p.

Bring a pot of salted water to a boil and add in the pasta - after you have removed the cauliflower from the oven.

Boil the pasta for about 8 mins - or until aldente. Using a slotted spoon - add the pasta directly to the sauté pan with the sausage. Now add in the cauliflower and mix well. If you need to - add in a ladle or two of the pasta water. Mix well and toss in a handful or two of the cheese. Serve immediately - always having extra cheese on the table. Enjoy a crisp, chilled white wine with this dish.


Buon Appetito.