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Here is today’s appearance on CNBC  World Wide Exchange with Brian Sullivan


Things you need to know.

– US companies pull contracts with Huawei
– China not happy – trade talks stalled
– Trump warns Iran and expects them to play nice in the sandbox
– Mkts likely to test support this week.

So stocks had a roller coaster ride on Friday…. losing ground early on, only to be boosted higher –  making a 300 pt swing on the Dow after Donny announced via Twitter at 10:15 am when the mkts were down 200 pts –   that he is eliminating steel tariffs for both Mexico and Canada – as he tried to change the narrative in the mktplace as well as change the direction of stocks going into the weekend….Algo’s responded in kind and took the mkt up 300 pts in less than 45 mins…All of the other indexes joined in and remained higher for 15 mins or so  before it began to refocus on the trade issue with China (going into the weekend)  – ultimately weighing on the mkt – leaving so many unanswered questions – Did the Chinese really walk away from the table? Are there meetings scheduled?  Will China dig their heels in and move on? Is Trumps strategy working?  (Just to be clear – he is not losing support from his base at all and in fact it appears as if he is gaining support).    By the end of the day – the Dow lost  98 pts, the S&P gave up 17 pts,  the Nasdaq fell by 81 pts and the Russell 2000 lost 21 pts. ….

The weekend was quiet on the trade front – no one from either side taking to Twitter to negotiate US/China trade terms….and that’s a plus – but Donny – unable to control himself – does take to Twitter to carry on diplomatic conversations with Iran – over nuclear ambitions and what might happen if Iran decides to attack US assets….saying that “If Iran wants to fight, that will be the official end of Iran.  Never threaten the United States again!”.    And then NYC Mayor Billy DeBlasio makes his first road trip as another Democratic Presidential Candidate in the 2020 election cycle.  Which now makes 24 contenders – I think – so first we can expect to see them slaughter each other as they vie for the nomination – and then it will be another 6 months or so of headlines between Trump and who ever is the chosen one…..And while mkts don’t price on politics per se – they will re-price on policies that are advanced as it becomes clear what sectors those policies will affect….so stay tuned – the next 16 months can be fraught with danger…..(or not…depends on your point of view).

The other big story that continues to build is Huawei and the restrictions that Trump now imposed on US companies doing business with them…in effect – US companies can no longer do business with Huawei – unless they have special permission…this is designed to put even more pressure on China to come to the table to negotiate in good faith – but looks like it may do just the opposite.  While a long list of US companies have now announced that they will no longer do business with China – The Chinese gov’t is not coming back to the table just yet.  As a result this morning – we are seeing pressure on stocks and more pressure on tech stocks to be sure….as this story builds.  

Overnight Asian mkts were mixed – Hong Kong and China losing 0.57% and 0.85% respectively while Japan and Australia rose 0.24% and 1.74% respectively.   New out of Japan that 1st qtr GDP grew by 2.1% vs. the expected 0.2% contraction that so many analysts had broadcast.   In Australia – ‘Shock Elections’ produced a win for the conservative party and is already being compared to Trumps win back in 2016….. and like Trumps victory – scores of polls predicted defeat for the conservatives leaving so many to wonder what happened.

European mkts are also under pressure – down more than 1% across the board with Italy suffering the worst at minus 2.59%.  All the headlines contributing to the negative mood – Breakdown in Trade Talks,  Iran, BREXIT, Rising Oil etc…all causing nervous and tired investors to take a breath.  Volumes are not heavy – and so much of the weakness is driven by passive algo strategies, creating opportunity for active stock pickers.  FTSE -1.04%, CAC 40 – 1.50%, DAX – 1.53%, EUROSTOXX – 1.60%, SPAIIN -0.98% AND ITALY – 2.6%.

US Futs – which had been up all night – turned negative at about 5:30 am this morning as European mkts began to fail.  The OECD (Org of Economic Cooperation & Development) warning this morning that the US/China trade uncertainty is the ‘enemy of growth’ and so they slashed their forecasts to 3.1% for global growth down from 3.9%  – as they kick off their Spring Forum in the City of Lights (Paris) today.  So the headlines are not screaming ‘positive’ – so the algo’s are driving the action.  While there was no trade news over the weekend – the Huawei story not only is escalating the conflict but will be the topic of conversation today and this week as analysts/strategists opine on the amount of damage this may inflict on China, the US and the global economy.  There are no real ECO reports today to speak of – but further on in the week- we will get hit with a rush of data points that will also set the tone.  Existing and New Home Sales, US Manf PMI, Services PMI, Durable goods orders and Capital Goods Orders.  We will also get 2 regional FED reports – Chicago (today) and Kansas on Wednesday.  Wednesday will also bring us the latest FOMC (Fed Open Mkt Committee) report – where I expect that we won’t learn anything new…..Fed to stay on hold until they don’t.  

Oil is rising as the Saudi’s make it clear that they have no intention of increasing supply by any significant amount – Saudi oil minister – Khalid al-Falih had this to say – ‘there is consensus among OPEC and the allied oil producers to drive down crude inventories ‘gently’ but would remain responsive to the needs of a ‘fragile market’.  So for now – oil is up 23 cts at $62.99/barrel – leaving it in the $61.75/$66 range for now.  If tensions continue to build between US and Iran – then we can expect that oil will surge higher just because there is tension and OPEC is not going to just open the spigot yet.  They would love to see oil in the $70 range before that happens.

And Gold which had sold off in the past week testing support at $1,269/oz – is up today on global tensions…rising 40 cts to $1,276….This is a safety trade and if trade doesn’t advance and geo-political tensions continue to rise -we could see gold move up and test $1,305/oz fairly quickly.  

US futures are now down 17 pts on the S&P,  while the Dow is showing a 100 pts loss on the opening….Nasdaq – mainly Tech – is down over 85 pts as the Huawei story is front and center and the Russell 2000 is down by 9 pts.  And while I do not think the bottom is falling out by any stretch – no one should be surprised to see the S&P test support at 2,776 with all of the noise that is taking up the airwaves.  Given the lack of eco data the negative headlines will drive mkts today and any formal retaliation by China for the Huawei decision will make the trade situation worse, and send stocks lower.

Take good care.


Sautéed Veal Scaloppini in White Wine & Porcini’s

You will need:  3/4 oz of dried porcini, 1/b of fresh mushrooms, ½ stick butter, dried sage leaves (finely chopped), 6 veal scaloppini, ¾ cup white wine, chopped Italian parsley, s&p, ½ cup heavy cream.

Soak the dried porcini in 1 cup of warm water for about ½ hr.  Once soaked – remove with a slotted spoon – next line a strainer with paper towel and strain the soaking water into a bowl and set aside.  Rinse the porcini in cold water to remove any grit then large chop – set aside.  

Next rinse the fresh mushrooms then cut into thin slices – set aside.
Add the butter and the sage into a sauté pan and turn heat to med high..add a touch of olive oil to prevent the butter from burning.  Next add the veal scaloppini so as not to crowd the pan.  Brown well on one side – then flip and brown the other side…you should probably cook for about 4/6 mins total….they should be pink on the inside…..
Add the wine and let it boil – after 30 secs or so…remove the veal and place on a plate.  continue to steam the wine – scraping the bottom of the pan until all the wine is evaporated.  Now add back the mushroom water..and the porcini’s to the pan….stirring – allowing all of the liquid to evaporate….. Now add the fresh mushrooms and the chopped parsley.  Season with s&p – turn heat to low and cover pan….the fresh mushrooms will make their own juice – keep cooking – stirring every once and a while – remove cover until the juice evaporates.  Now add back a splash of white wine and the heavy cream and stir until it becomes a little thicker – 3 or 4 mins.  Now – season the veal with s&p and add back to the pan – leaving long enough just to reheat.  Turn them once or twice to assure even heating.

Present on a warmed plate and serve this dish with steamed asparagus – seasoned with s&p and a dab of butter.  Prepare a salad of arugula, Boston bib and maybe some fresh spinach.  Add red onions, cucumbers and sliced tomatoes.  Season with s&p, oregano, a squirt of fresh lemon juice, red wine vinegar and Olive oil.    I like a nice Merlot with this meal as it is a medium bodied red.

Buon Appetito

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