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The S&P closed at 2744.28 – So today’s circuit breakers are:

 Level 1.  192.09 pts (7%) or 2552.19

Level 2.  356.75 pts (13% total) or 2387.53

Level 3.  548.86 pts (20% total) or 2195.42


Uncle Jay (Powell) takes center stage on Capitol Hill…and I have one word to say –


 Stocks – which initially tried to move higher – appeared to finally hear what the Chair was saying  and he made no apologies for it whatsoever – by the end of the day the Dow plunged 300 pts, the S&P gave up 35 pts and the Nasdaq choked – falling by 91 pts all as Jay held his ground and made it clear that he will NOT be driven by the automated algorithmic temper tantrums that have seemed to drive the conversation…….His job is to steer the economy and steer it he will…….

 Good evening Asia, Good afternoon Europe and Good Morning America….How are you? Did you happen to watch the show yesterday?

 “The Jerome Powell Meets the House Financial Services Committee Show”

 Remember what I told you…. it’s really a hoot to watch because so many of the members of these ‘fairly important’ congressional committees have absolutely no understanding of what the role is for the lead central banker in this country and possibly the world. So instead of trying to understand this role and then engage accordingly – we all were subjected to the stupidity……but in the end – Chairman Powell handled himself like the super star that he is……

 OK…let’s start with the very basic question, a question that you would think MEMBERS of the house financial services committee would understand. It’s called “Know your Audience” and in this case the Audience is the FED Chair – so do I dare ask the question?  

 Do they know what his job description is?  Did they know their audience?

 (This seems to be a question that so many of the Democrats on this committee FAILED TO UNDERSTAND) So let’s define it so that everyone is on the same page –

 The mandate of the FED Chair and the FED – given it by The Banking Act of 1935 (Post the Great Depression) is to be the public face of the Federal Reserve Bank and the CEO of the Federal Reserve Board. His main responsibility is to carry out the mandate presented to him in that banking act…which is to ‘promote the goals of maximum employment, stable prices and moderate long-term interest rates’ He/She testifies twice a year before both houses of congress on issues that include ‘monetary policy objectives’.  He/She is also the Chair of the FOMC (Federal Open Mkt Committee) which is critical in setting short term US Monetary Policy.   That is the broad mandate…….

 So instead we had to listen to so many of the Democratic members of the committee waste his time by asking questions that have zero relevance to his mandate…

 Massachusetts Democrat Michael Capuano – wanted to know what was Powell’s position on a UK law forcing companies to pay employee equally – regardless of gender – an issue that has absolutely NOTHING to do with Powell’s mandate… HELLO???

 Then we heard from Georgia Democrat David Scott b*tch about White House backed tax cuts and the reductions in entitlement programs like food stamps…REALLY?

 And then California Democrat Maxine Waters wanted to know if there were going to be a range of diverse candidates on the agenda to fill NY Fed Pres – Bill Dudley’s job this year…. Are you kidding me??  

 And the useless questions kept coming from that side of the aisle…and while these may be important questions to ask someone – THIS WAS NOT THE PLACE TO ASK THEM…. Chairman Powell has absolutely no control or political will to get involved in subjects that Congress needs to deal with…. Maybe someone should explain that to the Democratic party….

 *****In my opinion – the lack of understanding by members of the house financial services committee should demand that we throw the bums out…but I digress….****

 So as Jay laid out his vision and his acknowledgement that the economy is performing better than it has been, recent tax cuts and gov’t spending plans will boost economic growth in this country and that the strength in the labor mkt will cause inflation to move towards the 2% target – at which point –  that could cause the FED to raise rates more than 3 times in 2018….so whoever started the rumor on Monday that he was willing to accept inflation of 2.5% sending the message the he would be more dovish – now has egg all over his/her face….. Powell’s comments made it clear that he will not be beholden to mkt volatility or Wall St temper tantrums in his quest to steer the economy….

 So – stocks began to fall – closing on the lows of the day, the VIX surged by 18%, bond yields, as expected, rose and FED Futures now reflect a 33% chance of 4 rate hikes this year…. each hike of 25 bps and the Dollar index (DXY) rallied…. Krishma Guha – Head of Global Policy at Evercore summed it up perfectly –

 “The basic takeaway is not complicated.  The likelihood or moving to a four-hike baseline is March has gone up”

 Bingo!  Let the mkts and the algo’s do what they want…. Jay is not going to be run off the road – because some trader doesn’t like what he heard…. It’s time to stand up and say BS! ….so, if risk models need to be adjusted to reflect this then so be it…….and let the mkt do what it needs to do….and if earnings and the global economy are as strong as indicated then any pullback will be muted as investors re-assess risk…. This is not rocket science…. The mkt will adjust – it always does….

 His next appearance in front of the Senate Banking Committee is on Thrusday….so today we will get a break from the antics to digest some economic news….

 2nd revision of 4Q GDP is expected to be 2.5%, Chicago Purch Managers Survey is expected to be 64.1 and Pending Home Sales of +0.5% would be unchanged from last month.  

 Overnight – global mkts are all reacting to the new FED chair comments….and they too – don’t necessarily like what they heard, but they NEED TO HEAR IT…. Chinese manf PMI missed estimate coming in at 50.3 vs. exp of 51.1 the EU’s February HICP Flash report was in line at +1.2%.  (HICP is the same as US CPI and is an inflation type report).  Japan -1.4%, Hong Kong – 1.36%, China – 0.87%, and The ASX – 0.68%.  In Europe – FTSE – 0.21%, CAC 40 -0.49%., DAX -0.41%, EUROSTOXX -0.45%, SPAIN -0.62% and ITALY -0.33%.

 Oil is down 0.09 cts at $62.92-  as US stockpiles rise…… (think shale production).

 Gold fell yesterday and is now below support at $1,324 on the back of a strong dollar – this morning it is attempting to rally, but will most likely hit resistance at that number.  

 US futures are flat in pre-mkt trading as we continue to digest the news….and with nothing coming out of the FED today – traders will be looking for shopping opportunities…if only for today…. tomorrow bring Jay back to Capitol Hill for round two.  Yesterday’s sell off brought us right back to support at 2734 – a level that we will most likely test today to see if anyone is there defending it…. if not – then a move lower ahead of his testimony tomorrow will follow.  If it holds then a ‘Jay Powell’ Rally will ensue……as investors recognize that Jay’s frankness and disregard for the ‘noise’ created on Wall St by automated algorithmic trading means nothing to him.

 Take good care –  


 Veal Piccata

 This is a classic Italian dish – comfort food really – is easy to prepare and make and can be served with a number of sides – from the classic buttered egg noodles – to Garlic Herb wild rice and French green beans.  Total time to table – maybe 30 mins….

You will need:  pounded thin veal cutlets, leg white onion (Vidalia is best), garlic, olive oil, fresh lemon, flour, butter, white wine*, capers, chicken stock (or veal stock if you have it), Chopped Italian parsley, s&p…

*some recipes call for Sherry – I prefer a dry white wine

Start by squeezing the lemon to get the juice -set aside.

 Season some flour with s&p and put in a shallow bowl. Dredge the cutlets in flour and set aside.

Now heat up a large sauté pan and add olive oil, crushed garlic, and diced onion – sauté for about 4 mins or until the onion becomes soft and translucent. Remove and set aside

Next add butter to the pan and let it get foamy……

 Add the cutlets and brown on each side – (about 3 mins per side) – remove and set aside.

Now add the wine, fresh lemon juice, and capers to the sauté pan and scrape the bottom to loosen any of the bits from the pan…. return the onion/garlic to the pan and mix well. You can add another slice of butter now if you wish…. Now – slowly – re-introduce the veal cutlet to the sauté pan – heat is high to bring the sauce to a boil…. Now – turn heat to simmer and cook for maybe 3 or 4 more mins.  Adorn with chopped parsley….

If you are going to serve it classic style – then you will have boiled egg noodles, strained them and added the butter…. make a bed of noodles and then place the veal cutlets on top – making sure to sauce them generously.

 If you opt for something different – try a wild grain garlic herb rice accompanied by steamed French cut green beans.  Choose a medium bodied red and enjoy….

 Buon Appetito

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