The Weakness Continues to Build

Winners and losers.....who was at the top of the list yesterday?  Tech - made a comeback after getting clobbered in the previous 3 or 4 trading sessions - traders clearly taking advantage of the dislocation caused by growing concern over the direction of tax reform.  Names like FB - which lost nearly 8% rallied 1.2% yesterday, NVDA - down over 11% found support among the investment community yesterday and rallied by 1%, AMZN which was down over 7% rallied by  +0.67%...and while the tech sector did rally - the Nasdaq index did end the day in negative territory - suggesting that the move in a few big names was still not enough to turn the tide on the broader index. By the end of the day - the Dow lost 110 pts,  The S&P gave back 9, Nasdaq weakened by 13 pts, the Russell lost 15 and the Transports gave up 140 pts......
 
All most everyone else suffered under the weight of selling pressure as the debate rages on in DC over the future of tax policy, Friday’s looming budget deadline  - remember - we are about to run out of money on Friday if those clowns don’t pass another ‘stop gap’ measure to keep the country moving.....now all expectations point to a 2 week extension - so no need to get all worked up just yet and don’t forget next Wednesday’s FOMC rate decision — not that anyone should be surprised at all (hint:  The FED is expected to raise rates for the 3rd time this year).  
 
The surprise -if there is one - will be in the tone of the conversation and the words that Janet uses, where she places them in the sentence and what she emphasizes  - expect the ‘smart algo’s’ to parse every word - looking for a clue..... Clue for what?  If you expect the FED to change the course of the conversation - think again.....she could not be any clearer -
 
The US  economy is on solid ground, unemployment at historic lows, GDP now printing at 3+%, taxes are about to get cut, (or that is what they tell us), US manufacturing is on the rebound, housing construction is on the upswing, Fed’s beige book sees nothing but better days ahead, Energy prices have stabilized, the dollar is getting stronger, the VIX remains near the lows, the European economy is on the mend - the UK/ EU divorce is not expected to create chaos,  global businesses are reporting better numbers, guidance is strong...blah, blah, blah.....  Rates to rise 3 more times in 2018 - we need to be in front of the 8 ball and not behind it and Santa has no intention of leaving coal in anyone’s stocking........get the picture?  
 
Either way - the trend is feeling a bit exhausted.....Financials, Consumer Staples, Industrials, Energy all came under pressure as trader types continue to move it around.  Remember - All of these groups have enjoyed a rally in the past week - just as tech was under pressure....so yesterday saw that strategy turned on its head.  Tech rallied and the other sectors - winners of the past week - came under pressure - as the move to create ‘alpha’ is alive and well.   
 
Global Mkts are under pressure again today...Asian Mkts closed off small, but European Mkts - which just started trading are under the gun....as investors there continue to dissect US tax policy, Brexit discussions and the FED rate decision.  While we will get some eco data today - none of it will really be a mkt catalyst either way.  ADP employment is expected to show an increase of 190k jobs - 
 
Oil is down 0.80 cts at $56.81 - after the API (American Petroleum Institute) reported a sizeable build in inventories. Watch for the EIA (Energy Information Admin) report later today.  Will it also warn of building inventories putting further pressure on oil?  There is some support right here at $56.80 - but I wouldn't be surprised to see it test $56. 
 
Gold is up $3.60 at $1268 after being beaten up yesterday....after a $16 swing  - It has broken all supports and is struggling to pierce up and thru what is now resistance at $1,277.   
 
US futures are looking weaker again this morning - currently down 3 pts as the debate rages on.  Real support (50 dma) for the index is 2575 - but I would expect to find buyers defending the 2600/2615 level.  If we pierce 2600 - then watch for the selling to accelerate.  As we move into the final weeks of 2017 - we can expect the Mkt to remain in the 2600/2640 range.  Unless those bozo’s somehow screw it up.....(Bozo's could be any number of people - Congressmen, Senators, Fed Officials, Chubby (Kim Jung On), Trump.....You get the picture...)
 
European mkts are lower as the uncertainty over BREXIT continues to permeate investor psyche.  German Manf orders did beat the exp but no one seems to be paying attention to the positives at the moment. FTSE +0.04%, CAC 40 - 0.46% DAX - 0.92%, EUROSTOXX - 0.68%, SPAIN - 0.66% and ITALY -0.48%
 
 
Eco stats today include:  ADP Employment - exp of 190k,  Mortgage Apps came in strong at +4.7%.  there are no Fed officials scheduled to speak which will leave investors focused on tax reform as well as further weakness in commodities - Gold, Copper, Oil, Platinum, Silver etc.  (The Bloomberg Commodity - BCOM Index -  is now down 3.7% since early November.)   
 

Take Good Care

KP

Bay Scallops in Black Truffle Cream Sauce

Feast of the 7 Fishes - #3  

For this you need:  Bay scallops (the little ones), olive oil, butter, heavy cream, white wine, shallots, garlic, black truffle, white truffle oil, s&p, Brussels sprout leaves and fresh grated Parmegiana and Medium Shells (optional)

Ok – you can make this dish in 15 mins…..Put a pot of salted water to boil.

In a large sauté pan – begin with a ½ stick of butter and a splash of olive oil – turn up the heat to med.  Now add in the sliced shallots and chopped garlic…sauté in the pan for 5 – 8 mins….now – turn up the heat and add in the rinsed bay scallops – you want to sear them quickly. 

If you are serving over pasta - Add the pasta to the boiling water – stir. 

Next – once the scallops are seared – turn the heat down to med and deglaze the pan with some white wine – allow it to steam off a bit – now add the heavy cream and shaved black truffle.  Stir well.  Now add in the white truffle oil – this is key – you DO NOT need much – it is very potent…add – mix, taste.  If you need a bit more then do so…but go easy – do not overpower.

Now take the leaves of the Brussels sprouts (cut the bottom and the leaves fall off) and add to the pan – this will give a nice contrast in color.  Season with s&p.

Taste the pasta – should be almost aldente….strain – reserving a mugful of the water.  Add the pasta shells directly to the sauté pan – pour about ½ of the pasta water in the pan and mix well…..Taste and adjust if necessary.  Next add a handful of the cheese and mix. You will notice that the shells capture the scallop and some of the cream sauce….perfect. 
Serve immediately.  Enjoy with your favorite white wine. 
 

  
Buon Appetito.