Editor's Note: Combining his passions for the markets, humor and food, "What's cookin' with Kenny Polcari" is a blog published twice weekly on CNBC.com. With more than 30 years of experience on Wall Street, Polcari provides insight and analysis on the markets as well as a recipe du jour. Buon Appetito!
Welcome to September, the final month of the third quarter and one that usually holds a fair amount of volatility for the markets.
Last week, the market edged lower, struggling under the threat of a U.S. attack on Syria to finish August with a loss of 4.4 percent. Was this action a harbinger of things to come? With so many mounting issues: U.S. macro data, U.S. budget and debt ceiling debates, the Syrian/Middle East crisis, global economic conditions and the looming Federal Reserve tapering policy debate, investors around the world have much to consider during the coming weeks.
In early August we were testing the limits of investor confidence. It seemed that no matter the news, the market marched higher. Bad news was good news (for the market) and good news (what little there was) was GOOD news.
The S&P hit new all-time highs in early August only to pull back as concern grew over Fed tapering chatter. No matter that the macro data continued to disappoint causing bond yields to tick higher while unrest in the Middle East helped to push oil prices to a 30-month high.
Do not expect the concerns to just go away. Over the weekend global investors were glued to the TV as the Obama administration continued to make its case that Syrian leader Bashar Assad needs to be punished for allegedly using chemical weapons on his own people last month killing more than 1,400 people including more than 400 children.
I do not think that the Fed will begin tapering in September. I think the Fed will err on the side of caution at this month's meeting citing recent weak U.S. economic data, dollar strength and higher interest rates.
Even so, this will not stop the speculation swirling around the Fed's decision and any further pullback will be viewed as a longer-term buying opportunity. Asset managers will take advantage of fear and weakness adding to or creating new positions at lower prices.
The front page of Barron's this weekend summed up this position nicely "The Bull's in charge." Essentially as bears pile on and fear causes some to withdraw, investors with a longer-term horizon will benefit greatly from the current sale taking place in the U.S. capital markets.
Some of the Street's best strategists are calling for a 20 percent rise in the market over the next year and this comes on top of the current 15 percent rise year-to-date.
The breaking news that Microsoft is buying Nokia's cellphone business is igniting a new wave of merger and acquisition activity. Shareholders are demanding that companies do something constructive with all this cash on hand and long-term financing rates so low. Watch for more activity in the months ahead.
But for this week, Friday will be the day that investors are really waiting for; the monthly nonfarm payrolls report, the final read prior to the Fed policy decision. Consensus is for 180,000 jobs to be created.
The key to this report continues to be the growth of both part-time jobs with lower wages and no health insurance mandate versus full-time jobs that offer higher wages and carry a health insurance mandate with much higher costs in order to support the Affordable Care Act. This, as we have seen, is one of the biggest roadblocks to job creation and renewed economic vigor.
(Read more: List of worries in September is about to get longer)
Sour cream, bacon and leek quiche—(Yes, I said quiche)
Quiche—a savory pie filled with eggs, meats, veggies and cheeses, it can be served for breakfast, lunch, brunch or dinner.
Here's what you'll need for today's version:
- Sour cream
- Bacon bits
- Sautéed leeks
- Gruyere cheese
- Fontina cheese
You begin by cutting up a package of bacon into bits and frying it up in a fry pan. Once done, remove, place on paper towels and drain two-thirds of the bacon fat from the pan.
Next, trim the end of the leeks, and then thinly slice the white stalk until it turns into the green leaves. Add to the fry pan and sauté until soft and translucent. Set aside.
Preheat oven to 400 degrees.
Beat 6 eggs and add in 8 oz. of sour cream, whisk to blend. Season with a bit of pepper, no salt needed.
Next, grate the Gruyere and Fontina cheeses and set aside.
Now lay out your pastry dough (pie crust) in a pie plate. Press it into place and up the side. Now place in the oven and bake for about 5 to 7 minutes—just until the dough takes shape. Now remove.
Next add in this order: bacon, leeks, cheeses and finally the beaten eggs and sour cream allowing the egg mixture to cover the ingredients. Now place back in the oven at 400 degrees for 10 minutes. Reduce heat to 350 and pierce it with a knife in another 20 minutes. You want the knife to come out dry and the top to be a golden brown. Remove and let stand for 5 minutes before you cut it.
About Kenny: Kenny has more than 30 years of experience on Wall Street. Currently director of NYSE floor operations on behalf of O'Neil Securities, Inc., he has also worked for Icap Corps, LLC and Salomon Brothers. You can follow Kenny on Twitter @kennypolcari and visit him at kennypolcari.com.
Disclosure: The market commentary is the opinion of the author and is based on decades of industry and market experience; however no guarantee is made or implied with respect to these opinions. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of O'Neil Securities, Incorporated or its affiliates. The author is not compensated by CNBC for this or any other written materials found on CNBC.com.