Stocks rallied on Monday as excitement continues to build over US/China trade

Stocks rallied on Monday as excitement continues to build over US/China trade. As noted yesterday, Vice Premier Liu He told Reuters that "substantial progress" is being made and yesterday the administration doubled down on that statement. Larry Kudlow went so far as to say that the December tariffs could be eliminated IF the current trade deal gets signed... and Boom, off we go....

Initial market reports are great. This will only add to the feel good mood. Trade remains an issue and recent talk of "Free Speech" is now starting to be a focus. In trade war news, some elected officials are now asking: Do we continue to negotiate with China while they attempt to silence our voices?

Just something to consider...

Raymond James analyst comes out and raises his price target on Apple from the current $250/share to $380/share. BA continues to deal with the Max 737 fallout. JNJ gets beaten up over opioids and baby powder and BOOM... The algos go wild. The Dow got slammed early on, while the broader market surged ahead. So here is the issue: The Dow is only 30 names and both BA and JNJ are in the Dow. So, when they are getting beaten up, you really have to pay attention to the broader market represented by the S&P, because that will really tell the story of the US economy.

This is a big week for earnings: MCD, PG, UPS, BA, TRV, WHR, CMG, UTX, CAT, LLY, WM to name just a few. And PG hits it out of the park, reporting earnings of $1.37 vs. $1.24 share. UTX kills it as well. Now look, all of these names are all fairly big names so you can be sure that there will be plenty of scrutiny. But with the market near all time highs, the expectation is that they will not disappoint... So beware, because if they do, if these big names begin to miss or guide lower, then expect the market to follow suit as well. That does NOT appear to be the case this morning. US futures are UP as investors begin to digest the latest good news today.

BA was all over the place as it got the sh*t kicked out of it again. It was down 17 points early on, but was rallying back as the day wore on. More news about the 737 Max and the flight control system: Suddenly revealed emails from a pilot who questioned the flight control system more than two years ago are causing the latest round of selling. Analysts from Credit Susie, First Boston, and UBS began to cut their estimates. Jimmy Cramer slammed the company on Squawk on the Street, saying that "Wall Street got had" and "Wall Street thinks Muilenberg (Boeing's CEO) bagged them." He went on to say that while he believed in them early on, he is not sure that he believes in them now. And BOOM, the bottom falls out. Now to be fair, it was probably going to fall out anyway. But the Cramer perspective forced a much bigger fallout, and then maybe a much bigger opportunity if you think that the selling is overdone. It feels like capitulation here. so let it hash out and then take a look. So it's not a matter of if, but a matter of time. Typically after such a break, you need to let three days go by before you really commit to taking a look at the name. You'll have plenty of time to get in, or add to a current position, but don't react right now. Let this play out ‘til Thursday.

The stock is in for a volatile ride until there is real clarity on the issues and until heads start to roll. Muilenberg, for one, needs to go. Some street analysts are suggesting that the whole board should go. So this story isn't over yet by any means. But considering that there are two aircraft companies in the world, BA and Airbus, you have to believe that at BA will right the ship. Suffice it to say that if you like the stock, it is a long term play... capisce?

Next up was the BREXIT drama. As expected, the UK Parliament did not give PM BoJo any leeway. They voted down his latest deal and forced him to "beg" the EU for more time. And as you might expect, he is not happy about that either. But, that did not deter the markets. The sense is that there IS a deal. There IS something that has been worked out. So the idea that a NO-DEAL BREXIT was possible, is now no longer a reality. And that is a positive. Now the decision we are all waiting for is whether or not the EU will grant the extension. And if they do, that opens up the UK to another election, which is all being viewed as favorable. By the end of the day, the FTSE added +0.18%, CAC 40 + 0.21%, DAX +0.91%, EUROSTOXX + 0.58%, SPAIN +0.78% and ITALY +0.70%.

This morning, as noted, US futures are up. Dow + 26 pts, S&P +2, the Nasdaq + 11 and the Russell + 1.

Economic data today includes Existing Home Sales and the Richmond Fed Survey. The focus is on earnings and trade. BREXIT has a couple of more days to go before we get any news.

 

Veal Polpettone

This is a great dish.

It is a veal meatloaf – but unlike a regular beef meatloaf – this one is stuffed with fresh grated Parmegiana, scrambled eggs and cappicolo – seasoned with s&p and then bathed in white wine at the end....It looks beautiful when sliced and presented. Now on Sunday I made it and used 2 lbs of ground veal – so that I ended up with a nice size veal loaf – and could have fed 6 adults. As a result I had to change the amount of ingredients - so if you are going to make only 1 lb of veal - then adjust accordingly.

For this you need: garlic cloves – sliced thin – (I used 6), 8 Eggs, 5 cups of fresh grated Parmegiana – (On Sunday I didn't have enough Parmegiana – so I mixed in 2 cups of fresh grated Pecorino Romano – delicious), s&p, Olive oil, butter, chopped cappicolo – (I used about 1 cup) and finally the dry white wine – nothing fruity. The recipe also called for chopped parsley -which I eliminated - more for color than taste.

Preheat your oven to 350 degrees.

Begin by mixing the garlic, veal, cheese, s&p and 5 of the 8 eggs. – Now go easy on the salt – because the cheese can be fairly salty – so I would err on the side of less salt when mixing – (you can always add a bit when you eat it) – then set aside. Now take the remaining 3 eggs and scramble them – melt about 1 tblspn of butter in a frying pan and over low heat add the eggs – let them set – rolling the pan a bit to get the eggs to set. Now flip the eggs to cook the other side. Once done – remove and slice into strips.

On a long piece of wax paper – lay out the veal mix and form into a rectangle about ½ thick. With 2 lbs of meat – you will have a nice size rectangle. (Using the width of the wax paper as a guide – spread the mix lengthwise). Now spread the cooked eggs and the chopped cappicolo over the meat. Using the wax paper – slowly roll into a loaf.

Find a suitable baking dish – add the olive oil – enough to just cover the bottom of the dish. Place in the oven to heat the olive oil – (you have not added the loaf yet). When the oil is hot – remove the dish and now carefully place the loaf in the dish and return to the oven to bake for 45 mins – do not cover it.

After 45 mins – add the wine – I used about 3 cups – pouring it generously over the veal loaf so that it was bathing in the wine - not drowning in the wine. Return to the oven and cook for another 15 mins. Remove and let it sit for 3 mins – slice into generous portions and serve hot. I served it with sautéed baby peas and a large arugula salad simply dressed with s&p, oregano, olive oil and fresh lemon juice.