• Stocks take risks as Omicron’s fears are overblown.

• Treasuries fall, yields rise.

• Oil continues to advance – now up $ 9 in 4 days.

• Fed to announce a doubling of the taper schedule.

• Feast of the 7 Fishes – # 5 – Posillipo mussels.

“Yes Virginia – there is a Santa Claus…” At least there was yesterday and again this morning…. As stocks around the world soar ……

Stocks jump as the Omicron variant appears to be inferior to what all the talking heads have told us it is going to be…. The variant is now in over 40 countries and as reported yesterday it is NOT causing all kinds of hysteria…. Hospitals are all functioning well and are not overwhelmed, death rates remain on the decline as more people decide to get vaxxed. The latest data from the CDC and WHO is don’t panic, take precautions, and be aware of those around you.

It was a safe day for some of the bio-techs.

Moderna – which jumped 67% in the days following the announcement of the new variant, has fallen 35% since we learned symptoms remain mild – just yesterday the stock fell 13.5% . You can believe CEO Stephan Bancell isn’t as happy as he was 2 weeks ago (when stock was skyrocketing) when he took to the air to tell us the current mRNA vaccine wouldn’t be enough. not and that we all needed another helping hand to protect ourselves. us as he sounded the fire alarm….…. (Think of the continuous sound of the cash register)…. PFE, REGN etc. all follow in the downdraft. The Biotech ETF – XBI also unable to recover is now down 19% in the past 4 weeks and down 23% year-on-year.

Interestingly, however, Glaxo Smith Klein (GSX) revealed that his treatment with antibodies to covid 19 is effective against a FULL combination of mutations in this virus … he rose 1.3% yesterday and increased another 1% this morning.

And it was a Risk On day for everything else…. The Dow ended the day up 646 pts or 1.9%, the S&P up 54 pts or 1.2%, the Nasdaq added 140 pts or 0.9%, the Russell up 45 pts or 2% while Transports gained 340 pts or 2.25%. Not a single sector in the RED…. Homebuilders – XHB tops 2%, Retail – XRT up 1.8%, Consumer Staples up 1.8%, XLF finance up 1.5%, Energy – XLE + 1.5%, Communications – XLC + 1.6%, Industry – XLU + 1.7%, Utilities -XLU + 1.5% and Tech – XLK up 0.9%. and Disruptive Tech – ARKK + 1.5%. And the list continues.

Crypto held up after the bumps they took over the weekend and this morning Bitcoin is up 2.3% to $ 51,200, Ethereum + 1.6% to $ 4,400 … the range of others continues to rise. trade erratically – but if you are there you signed up and volatility and it doesn’t cause you anxiety…. (Or maybe it is….).

10 year treasury bills retreated as investors shifted money from the Risk OFF trade to the Risk ON trade… Yields rose – from 1.34% at the end of the day to 1.43% … And discussions about what will happen in December The Fed meeting on Wednesday 15th is a priority… The Fed is now expected to increase the rate of cut from $ 15 billion / month to $ 30 billion / month – which should see the end of this program by the end of April – leaving the door open to part 2 – the rate hikes… that’s if Jimmy B doesn’t get what he wants and n ‘not raise rates while they fall… which is exactly what Jay told us would not happen… but the narrative has changed very quickly since Jay was fired – so nothing is off the table in done EVERYTHING is on the table.

Oil – continues to progress…. up 5.3% only yesterday and up 3% this morning – now trading at $ 71.64 / bbl…. up to $ 9 since last week. This after it became clear that “Omi” will not disrupt the economy nor destroy demand – as so many people complained just two weeks ago… The global economy is doing well… and will continue. buzzing for as long as the world’s central banks can control the narrative… I don’t think they can anymore… I think they’ve missed it and they’ll be forced to move – faster than expected for one big part of the market and that’s what will be the problem in the new year.

This morning we wake up to a stronger Asia – Hong Kong which was timed on Monday rose 2.5% overnight…. Japan + 1.9%, China + 0.6% and Australia + 0.95%. You now know that the Peoples Bank of China (PBoC) cut reserve requirements (which is stimulating) after Evergrande missed the bond payment – saying it couldn’t guarantee it had funds. sufficient for its repayment obligations – causing the markets to shiver. Additionally, the Communist Party has said it will stabilize the economy by 2022 – sending the message that it will remain stimulating. November trade data for China showed imports above expectations at 31.7% while exports did not raise expectations, rising just 22%.

European markets have taken precedence over Asia and are recovering strongly this morning…. all markets in the region are up by better than 2% …. credit is starting to be attributed to “lower Omicron fears” …… German industrial production rose 2.8% in October after a drop of 0.5% in September. While that number is good, it is still 6.5% below pre-pandemic levels.

US futures are on the rise again…. Dow +370 pts, the S&P + 62 pts, the Nasdaq by 290 pts and the Russell by 40 pts. Again – you can thank the latest version of Omicron…. which is “not serious”.

Ecological data today does not include anything really…. the real data won’t be released until Friday, when we get the last CPI (consumer price index) reading, and we expect it to be strong…. (Which is not good)…. CPI m / m of + 0.7%. excluding food and energy by + 0.5%. 6.8% y / y CPI, excluding food and energy + 4.9% …. This along with Monday’s latest PPI report will help frame the FOMC conversation on the 15th. The S&P closed at 4591, this which leaves it 4% below the 2021 intraday high of 4,743…. It is now on the upside again and through trendline resistance at 4547 which now becomes support – look for resistance at 4715 ish…. The Dow Jones which had completely collapsed – falling through all 3 trend lines… has now regained most of it and it is difficult to move up and break through the final resistance level. The Nasdaq continues to struggle and will remain the most volatile over the next 6 months.

I’m still in the camp that the Fed leads the conversation and the action and what we hear from them on Wednesday 15th will dictate the next step. I’ll say they do a good job telegraphing the range of options so investors can’t say they’ve been kept in the dark… the data is there for all to see – how you interpret it, c is what is important. I still think the downside risk is greater than the upside risk in Q1 2022.

Feast of the 7 Fishes – # 5 Posillipo Mussels

This recipe comes to us from the suburbs of Naples – Posillipo is an affluent suburb of Naples; it was built in the 19th century by the very wealthy – high on a cliff overlooking this famous bay of Naples. Posillipo is a recipe that you can use for both clams and mussels – I suggest using the mussels for Christmas Eve dinner.

You will need: Mussels … 3 dozen … thoroughly washed of all sand. White wine, clam juice, garlic, olive oil, s & p, 1 28 oz can have imported Italian Italian tomatoes – (not mashed), fresh basil.

In a saucepan – heat the olive oil and sauté the garlic – until lightly browned – do not burn.

Add 1 1/2 c dry white wine – nothing fruity – stir and let boil – after about 2 minutes … roughly mash the tomatoes and add to the pot with the juice.

(When you roughly mash them – you literally mash them in your hand – over a bowl to catch the juice. – you can also use the blender – but do it quickly – don’t mash) Add enough tomatoes to give it substance and color – you don’t need to add the whole can if you’re not serving it on linguine.

Add the small bottle of clam juice and the fresh basil leaves. Season with s & p. Lower the heat to simmer and cook for about 15 minutes. Now add the mussels to the pan and cover tightly. Cook until the shells open – maybe 8-10 minutes more … Discard any mussels that refuse to open.

Present this dish in a large bowl with the mussels bathed in the Posillipo sauce. This dish calls for toasted garlic bread to dip in the sauce.