And how about Tom Brady and those Patriots!...... We haven't seen a lead blown like that since Hillary Clinton blew her lead - but hey at least the Falcons, like Hillary won the 'popular vote'......The Super Bowl like the election kept everyone on the edge of their seats as Tom Brady sought redemption and got redemption....but hey - that's a whole other conversation......
The mkt soared on Friday - as Trump lit the fuse signing another executive order - this time rolling back regulations on banks - calling for an end to 8 yrs of rising regulatory costs and choking regulations that were legislated into existence after the GFC (Great Financial Crisis) by the Dodd-Frank bill.......
Bank stocks surged - JPM + 3%, BLK + 1.7%, C +1%, BAC +1%, MS +2.8%, WFC +0.9%.....as investors celebrated the fact that Trump is doing what he campaigned on......rolling back onerous and expensive regulations that went way overboard - now this is NOT to suggest that we eliminate all of the regulations - not at all - just the ones that have made it difficult for banks to lend and manage and grease the wheels of capitalism.
Look - there isn't anyone that will argue that the lack of regulation in the DERIVATIVES mkts (think CDO's (Collaterized Debt Obligations), ABS's (Asset Backed Securities), CDS's (Credit Default Swaps), MBS's (Mortgage Backed Securities) etc was responsible for the disaster that swept the world up in a crisis that no one could have imagined......Now those products were designed by the big banks for sure - but they were designed at THE REQUEST OF THE gov't to help facilitate and manage risk (to provide opportunity)........they were all traded 'over the counter' with no regulatory oversight or transparency and this lack of regulation in that ONE part of the financial services industry sowed the seeds of disaster years before...during the Clinton Administration when Alan Greenspan sat in the 'Catbird' seat....refusing to encourage regulation, refusing to acknowledge the threats and concerns in this part of the mkt - allowing lobbyists to manage the process and Why?
Because everyone was making money, no one was getting hurt, the mkt was going up and as we know money talks....as long as the mkt was going up - there was no reason to be concerned - the economy was humming along, EVERYONE was buying a home (even people that could not afford them - remember the "No Income Verification Loans, Sub Prime Loans?") - Loans that were born during that administration to encourage home ownership and all of those products were designed to assist the process......remained 'dark' and the 'less than transparent' derivatives mkts in those products didn't seem to be an issue - until it was....but by then - Clinton was gone, Greenspan was gone and the mess was left to Tax payers, Bush/Obama/Bernanke/Paulson and now Janet to clean up. So when those products failed - the reverberations were felt around the world......the LACK of regulation in those products became evident- the global economy crashed as investors sold what they could (stocks) because all of those unregulated DERIVATIVE products seized up - they were not 'tradeable' and the rest is history........so then legislators imposed such onerous regulations upon the WHOLE industry that they choked the very wheels of finance. So it is no surprise to see the big banks, the super regional banks and smaller banks rally on this news..... taking the broader mkt with it.
Unlike what so many thought - Friday's NFP report was a non starter. -..President Trump, Trumped that economic news...and while the top line number was better than expected, unemployment inched higher and wage growth was muted - so it was really a mixed bag.........and as discussed this report is the final statistic in the Obama legacy....this was not a Trump stat at all.......and while some in the media may try to pin it on Trump - suggesting that he is 'failing' already - that is utter non-sense.........like it or not - that stat belongs to Obama......the future belongs to Trump.
The Labor Department said the annual rate of average hourly wages slowed to 2.5% from 2.8% and Andrew Hunter, U.S. Economist at Capital Economics, said,
“The 227,000 rise in non-farm payrolls in January suggests that the labor market started the year on a reasonably solid footing. However, the drop back in annual wage growth is another reason to think the Fed will hold off raising interest rates until June”.
Look - the Fed will likely time their rate hikes with action from Congress, taking advantage of fiscal improvement by tightening rates... But what will they do if we all of a sudden see a mkt meltdown..will they push for more hikes or will they take a second look. Probability of a March hike has now fallen to about 19% - while a June hike is now at 68% - down 5% pts from last week...
Technically speaking - Despite another surge we continue to have breadth indicators that diverge greatly from index prices.......During January the percentage of issues that continue to trend above their 50-day moving averages has drifted from way overbought (near 100%) to near 65% at the end of last week. The other indicator that continues to show weak breadth is the McClellan Oscillator for the Nasdaq indexes. Since late December this Nasdaq indicator has barely moved into the positive breadth area - In fact, it continues to remain weaker suggesting that only a handful of issues is carrying the load....The enduring sideways correction will have to break out or break down at some point.....depending on what you think will dictate your next move....now while I am bullish - I also acknowledge that risk remains elevated. I do not expect the mkt to meltdown at all, but I would not be surprised to see the mkt pull back as Congress and the President start the debate....But like so many pullbacks - My sense is that those pullbacks will provide a longer term opportunity for investors.
US futures are flat in early trading...there are NO economic reports due out today...but we will hear from Fed Governor Patrick Harker of Philly at 4:30 - so this is also a non-event.....Expect to hear from Hasbro, FOX NWL & TSO as well as more political drama coming out of DC.
Gold is UP $7 this morning on the back of some of the inflammatory rhetoric coming out of Bill O'Rielly's mouth last night - when he called Vlad (Putin) a killer during an interview with Trump.....Oil remains a non-event treading water in the $50/$55 range - unable to break out or break down.
Veal Chop w/Tomato and Mushrooms
For this you need: 4 veal chops, olive oil, butter, onion, fresh sliced button mushrooms, garlic, sage, white wine, diced tomatoes, chicken broth, s&p.
You make this right on the stovetop in one deep sauté pan. Begin by seasoning the chops with s&p on both sides. In the sauté pan - heat up some olive oil and 2 tblsp of butter. Add the veal chops and brown on both sides....- maybe like 3 mins per side. Next remove the chops and set aside. Now add the 3 garlic cloves (smashed and chopped), 1 lg sliced onion and like 1 1/2 cups of sliced mushrooms. Cook until the onions and mushrooms are soft - maybe 10 mins...careful not to burn -
Now add in the diced tomatoes, 1/2 c of dry white wine, 1 sage leaf - minced - stir to mix well. Bring to a boil and let the alcohol burn off a bit - now add 1 c of the chicken broth - Now add back the veal chops - reduce heat to med low and cook for about 20 more mins. When ready - place the chop on the plate and spoon the sauce over each chop. Serve with a lg mixed salad and a roasted sweet potato.
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