"I'm not a cleanup hitter. I'm just batting fourth." -- Ben Zobrist

Batting a Thousand

Exciting! To be honest, I haven't been glued to the tube (or had that much fun) like that after they rang the closing bell in quite some time. Last night, just in case you avoid all forms of financial news after that bell sounds, the Federal Reserve gave all 34 firms passing grades on their capital return plans. This came after all firms tested had passed the first round of stress tests last week. The first round puts these firms through a severe, simulated economic crisis. Rising unemployment, collapsing real estate prices, simultaneous global collapse. Everyone sailed through that test just fine. Last night, though, was about money. Money for shareholders right now. There was one negative caveat. Credit card defaults have been rising in the real world. The current form taken by these "stress tests" put a focus on credit card losses and forced firms such as American Express (AXP) - Get Report and Capital One (COF) - Get Report to revise downward their capital return plans.

Away from those two, for the big banks though, it was party time. For those of us in the office, it was like watching sports. Bullish bets on the space paid off immediately. The new plans for increased dividends, as well as plans for corporate repurchases, came pouring in within minutes of the Fed's announcement. This news propelled shares of the big banks such as Bank of America (BAC) - Get Report , Goldman Sachs (GS) - Get Report , Morgan Stanley (MS) - Get Report , JPMorgan (JPM) - Get Report and Action Alerts PLUS charity portfolio holdings Citigroup (C) - Get Report  and Wells Fargo (WFC) - Get Report considerably higher in after-hours trading, after the financial sector led the broader market higher during the regular session. Huzzah.

Is It Still a Rotation?

We know that the financial sector led the marketplace yesterday. The sector ran 1.6% during regular hours. Banks led the sector. That industry ran 1.9%. Of course, anticipation of last night's events had given the financial space a nice boost, but there is more to it than that. Yields are rising. U.S. 10-year paper went out last night with a yield of 2.223%. This morning, the 10-year is giving up 2.244% at last glance. This, after kissing the 2.12% level earlier this week. Higher yields on the long end mean a steeper yield curve. This morning, I see the 2yr/10yr spread is up to 0.886%, which has grown considerably steeper rather quickly. For the banks, this simply means improved margins; and improved margins would make traditional banking great again.

Is it still a rotation if the financials, and the technology sectors hold hands an rally together? A rotation out of what? Utilities? The tech sector ran 1.3% yesterday, led by the semiconductors (+1.9%). A day earlier, as tech had melted down, the semis were hit the hardest late in the day, which proved to be one heck of a trading opportunity for those of us inclined.

I'm already on record liking the tech and healthcare sectors in the current environment. If you read me, then you know that I prefer to focus on the banks when possible. Are these three sectors going to be our leaders? Regular performance supports the techs. Health care has shown us regular performance, but remains a political football. (Shh, has energy found a bid?) Still, how can one completely ignore the track record? On top of that, you're going to pay me to own your shares? That's a biggie. The yield story? Suddenly going the right way. The banks. Not to be ignored.

Shades of Blue

With Amazon's (AMZN) - Get Report announced takeover of Whole Foods (WFM) still fresh in the minds of the investing public, Blue Apron went to market last night. The core business here, basically, is food delivery. Delivery of ingredients and recipes. The client then does the cooking for themselves. That's a business. I think. Though revenues doubled last year, net losses also increased for this start-up. In fact, Blue Apron is yet to make a profit. That's not that all that alarming for a new issue. That said, in the firm's prospectus, the firm tells you that it "may incur significant losses for the foreseeable future". This firm also expects competition in the space to only grow over time as well.

Concerns like this are why 30 million shares were priced at $10 last night. This was at the very bottom of the revised $10 to $11 range, after the firm had originally been looking at a range of $15 to $17. This price raises $300 million for the firm, which is obviously going to be far less than those involved had though they were looking at not too long ago. What do I think? I think that for me, this a wait-and-see, at best. The IPO price is cheap enough to accommodate a variety of investor profiles, but this is still a spec, and a spec is a spec. I have enough balls in the air. I don't need to be here.

Coordinated Normalization?

Senior ECB (European Central Bank) officials scrambled into "damage control" mode on Wednesday. This came after what was meant to be a "positive" speech on Tuesday, made by ECB President Mario Draghi forced the euro higher versus its peers, as well as putting upward pressure on yields across the region. Those forced into action reassured investors that financial markets had "misunderstood" Draghi's words. Obviously, the ECB is concerned that a "taper tantrum" will evolve when they start to draw down on policy accommodation.

Markets may have been reassured yesterday, but really, the tantrum is going to happen if economic performance allows for removal of stimulus. In the U.S., the Fed is already on the road and talking tougher all the time, despite obviously stumbling economic data. On top of that, the Bank of England's Mark Carney is suddenly talking about tightening policy. For those who don't follow central banking all that closely, when Carney ran the Bank of Canada, he was thought of as quite the hawk. You get tightening, or at least a publicly acknowledged intent to tighten from the Fed, the ECB, and the BOE? Well, gang, that means we're gonna dance. Can you say "coordinated normalization"?


08:30 - GDP (Q1-f):Revised to 1.2% q/q SAAR last month. First-quarter GDP was revised up from 0.8% in May, largely on improved numbers for consumer spending (still weak-ish), and government spending (still negative). The range of expectations for this final look at the first quarter stretches from 0.9% to 1.5%. My little birdie says that we see a second, though smaller upward revision.

08:30 - Initial Jobless Claims (Weekly):Expecting 240,000, Last Week 241,000. Nobody expects this weekly item to significantly surprise in either direction. The fact is that traders really do not pay attention to this series all that much anymore, due to its regularity. The four-week moving average in this space currently stands at 244,750, while the entire range of expectations spans from 236,000 to just 244,000.

10:30 - Natural Gas Inventories (Weekly):Expecting 65 billion, Last Week 61 billion cubic feet. Last week, we spoke of the need for Natty Gas to hang onto that trading level in the low $2.90s. Well, at least for now, mission accomplished. This commodity has rallied a rough 6% in just a week's time. As for supplies, that story has not changed. Inventories have grown for 12 consecutive weeks, and, as it appears, about to be 13.

13:00 - Fed Speaker:St. Louis Fed Pres. James Bullard will speak on the U.S. economy and monetary policy this afternoon from London, England. Last week, Bullard, who does not currently vote on policy, cautioned against the Fed's stated trajectory of tightening conditions. There will be opportunity for both the audience and the media to ask questions.

Sarge's Trading Levels

These are my levels to watch today for where I think that the S&P 500 and the Russell 2000 might either pause or turn.

SPX: 2457, 2449, 2442, 2432, 2421, 2411
RUT: 1441, 1433, 1426, 1420, 1409, 1403

Today's Earnings Highlights (Consensus EPS Expectations)

Before the Open: (CAG) - Get Report ($0.37), (STZ) - Get Report ($1.98), (LNN) - Get Report ($0.97), (MKC) - Get Report ($0.76), (RAD) - Get Report (-$0.01), (WBA) - Get Report ($1.30)

After the Close: (MU) - Get Report ($1.52), (NKE) - Get Report ($0.50)

What's Hot On TheStreet

Happy birthday iPhone: Apple's (AAPL) - Get Report iPhone turns 10 years old today! What an amazing product Steve Jobs and his team created. But, as TheStreet's Natalie Walters points out, the next five years for Apple could be radically different. Sales could well be boosted by new, non-iPhone products such as smart glasses and autonomous car technologies. Walters also mentions that iPhone demand may peak in 2019.

Apple, Wells Fargo and Citigroup are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL, WFC and C? Learn more now.

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At the time of publication, Stephen Guilfoyle was long Amazon, Citigroup, Wells Fargo, although positions may change at any time.