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Things you should know

  • All eyes focused on the     FED and the BoE
  • Oil spikes higher on     OPEC and Russian Cuts
  • Trade talks?  No     mention at all

 And the US did not disappoint as they followed global mkts higher – the Dow added 0.25% or 65 pts, the S&P tacked 0.37% or on 10 pts, the Nasdaq surged by 0.34% or  26 pts the Russell added 0.67% or 10 pts and the Transports were the star of the show adding 1% or 104 pts.

 Investors here at home took US stocks higher on Monday leaving global mkts all in positive territory  as investors around the world await news from both the FED and the BoE – and while the rumor of late has been that the FED’s next move will be a CUT – our sense at BJAM (Butcher Joseph Asset Management) is that the FED is leaning towards one more hike in 2019 – but that is down from the 3 or 4 hikes that were being discussed at the end of 2018 when the mkts had a meltdown.  Recall that whole discussion that began in early October that caused global mkts to collapse – sending the US mkts into bear mkt territory if even for a day or two.  Then a  sudden shift by the FED in both tone and execution (temporarily taking any rate hike off the table)  resulted in the quick snapback rally that began at year end and has now added back nearly 20% to the mkts causing some to think we are flat – but remember if you lose 20% on the way down – you need to gain 25% on the way back up just to be even.    

 Next – The BoE is also expected to hold rates steady – given all of the unrest surrounding BREXIT – so no surprise there at all.  And while central banks in Indonesia, Thailand and the Philippines are also due to make policy announcements ( expected to stand pat)  – no one here at home is coordinating investing in US stocks with any of those announcements.  In the end – investors will be listening to what all of them have to say about the state of their unions in light of a softening global economy but the directional drivers will clearly be the FED followed by the BoE. 

 And while US mkts ended the day higher – do not be lulled into complacency… it is entirely possible that the algo’s are pricing in a perfect ‘Goldilocks’ scenario – ‘Just right, not to hot or not to cold’ and could be surprised if the FED says that they see one hike later this year.  (Remember – the rumor now is that the FED holds steady – doing nothing at all or in some cases CUTTING rates) so a suggested increase could cause the algo’s to shift into reverse.   Volatility (VIX) has all but evaporated falling back to levels seen right before the October collapse so any indication that rates can rise in the near term will light a fire under the VIX sending that index higher as it sends global stocks lower. 

 So yes – the expectation is for both the FED and the BoE to do nothing at this meeting but investors will be listening to the ‘tone’ of his voice  while the algo’s will be searching for ‘words’ that indicate just how long this neutral rate environment will last and remember – the tone could be very different than the words and even words can have different meanings depending on the context of the sentence – and the algo’s can’t decipher that – so they tend to ‘shoot first and ask questions later’.  (Think October-December 2018). 

 Oil – which had begun the day weaker ended higher up 0.77% or 45 cts at $58.97/barrel after Russia confirmed that they will continue to slow production and OPEC cancelled the April meeting suggesting that they too will extend production cuts thru June – (and this helped send the energy stocks higher – the Energy ETF (XLE) adding 1.4%) –  as they (OPEC & Russia) try to force the price of oil higher after the sharp drop in 2018 when oil mkts came under pressure due to the expected slowing global economy  – never mind the surging output from the Saudi’s after the  murder of Washington Post Reporter Jamal Khashoggi (JK) at the Saudi consulate in Turkey ….Remember how the Saudi’s ramped UP production sending oil prices careening as they tried to redirect the narrative away from the Crown Prince –  Remember how the world was offended (and disgusted) with the Saudi’s but Donny withheld judgment because the Saudi’s suddenly increased production – which forced oil prices lower – which was good for a slowing global economy.    Oh it is a tangled web we weave…… 

 European mkts are higher again today – UK unemployment fell to 3.9% while the German ZEW survey (business expectations survey) fell to -3.6%  from an expected – 11% confirming a less pessimistic outlook and this is driving mkts higher.   As a result mkts centers across Europe are up better then ¾ of a percent.

 S&P futures are up  11 pts – as investors digest the better than expected European data and the expected ‘neutral’ stance by the FED (and BoE).  Interestingly enough – there has been very little talk of trade……and as I have been saying – the surge up and thru resistance at 2815 last week – set us up technically for a challenge of 2900 and if today’s early action is any indication – we are well on our way towards doing that. 

 Take good care.


 Lemon Chicken

 This is a great dish if you are planning a party….it is easy to prepare and goes along way.  You can make it ahead of time and just heat it up in the oven when ready.  Served with another entree in a buffet style along with a large mixed green salad, Rice Pilaf and some sautéed broccolini – it makes a great presentation.

 You will need to start with boneless/skinless breasts, and thighs.  rinse, drain and pat dry….

 To prepare – you need:  – 4 lemons – sliced into 1/8 inch slices…..seasoned flour (s&p), beef broth, butter and bit of olive oil.

 Cut the chicken breasts/thighs into bite size pieces – dredge in seasoned flour and set aside.  Next – in a large sauté pan – melt the butter and a bit of olive oil to prevent the butter from burning – make sure it is hot before adding chicken.  Add enough to fill the pan – but do not overcrowd.  Keep the heat on med high/high.  brown the chicken all over….it will take on a golden hue…..should be about 5 mins or so……

 next add enough beef broth to bathe the chicken pieces  – lay lemon slices on top of chicken and cover.  Turn heat to med and allow the lemon and broth to permeate the chicken.  About 3 / 5 mins more.  Keep your eye on it and turn the chicken so that it does not burn.  The broth will begin to thicken so make sure to not overcook.   Transfer to a baking dish and repeat process for the balance of the chicken.  You can cover and keep warm in the oven until complete.

 Buon Appetito.

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