If Elections were held tomorrow, The Democrats would win the Presidential election and the Senate for sure, and maybe even the House of Representatives; it is going to be brutal for Republicans come Midterm Elections.
This “powder keg” may not wait until then. For “then” (March) may be a moment too late. (Just ask Caesar).Circumstances are now showing this “powder keg” could in fact become – self-combusting. All courtesy of The Fed’s own words whether, stated, implied, written, or imagined.
"Our “net” equity market exposure then is relatively minor but given the longer term trend and given the minor correction to the downside over the course of the past three or four sessions, accompanied by rather obviously declining volume on the exchanges, our propensity is to find modest long exposure today."
European, Asian stocks and S&P futures all drop after traders were left with a sour taste from the potential fallout of Donald Trump’s order halting some immigration and ahead of central bank decisions from the U.S. and Japan. Markets in Hong Kong, China, Malaysia, Korea, Singapore, Taiwan and Vietnam are all shut due to the Lunar New Year public holiday.
"Like it or not, this is where we have been all along and a great many people are just now catching up. No matter what Janet Yellen says about the economy, she is talking out the side of her mouth. Internally, the recovery is gone, and it is never coming back."
In recent years, I’ve been chided for being eternally optimistic, or a perma-bull, when it comes to markets. I’ve seen the ever-present fear that has pervaded markets as a positive. But now complacency abounds and it seems to hinge on not much more than hope and a prayer - I’m worried.
It appears that Deutsche Bank's warning that the global economy is about to roll over was spot on, because moments ago the Bureau of Economic Analysis reported that GDP in Q4 rose only 1.9%, barely above the lowest forecast of 1.7%, and below both the consensus estimate of 2.2% and the whisper estimate of 2.5%-2.6%.
“At market tops, it is common to see what I call the ‘high-five effect’ - that is, investors giving high-fives to each other because they are making so much paper money. It is happening now. I am also suspicious when amateurs come out of the woodwork to insult other investors.”
"Global macro surprises have only been higher 5% of the time, typically roll over from these elevated levels and have shown first signs of softening. We believe global macro momentum is likely to roll over from current elevated levels. Lower macro surprises would be consistent with a tactical pull-back for equities."
"If a trade war developed between the two countries, both China and the U.S. would be negatively impacted," the People's Daily warned in a commentary. "In the end neither side would win, it would bring harm to other countries and that harm would be brought to others without benefits to the U.S. or China." Here is a quick look at the biggest losers...
US equity futures were flat, European stocks rose and Asia was mixed after the dollar posted a modest rebound overnight despite Mnuchin's "strong dollar" comments, while oil was flat and gold fell, as investors focused on President Donald Trump’s plans to boost growth. The pound fell after a U.K. court ruled that Parliament must vote on triggering Brexit.