While investors are focused on Italy, Bloomberg's Mark Cudmore warns that another Mediterranean country is poised to grab their attention very soon. A currency crisis in Turkey is rapidly deteriorating, setting the stage for dramatic and unscheduled central bank action.
"I don’t think anybody in the administration is looking for quote-unquote tariffs, but I think they are a cudgel if you will to lay out there if we can’t get the trade deals to be right-sided to now benefit the American people.”
"I can’t justify any of this. The lesson investors are getting is that everything is a buying opportunity and you need to not miss the boat. Brexit? Bullish. Trump winning the election? Bullish. Italy saying no to the referendum and the Prime Minister handing in his resignation? Bullish. Heck, all we need is the entire Belgian banking system to go kablooey and the S&P 500 will be at 3,000 by Christmas Eve."
"The environment remains uncertain with a number of potentially frosty developments. The result of the constitutional referendum in Italy is a harbinger of renewed turbulence that could spill over from the political arena to the economy – with Europe particularly endangered."
While the market overcame its initial scare following yesterday's counter-establishment Italian referendum vote, and European stocks proceeded soar in the overnight session by the most since Trump's presidential victory, what happens next in Italy is largely unknown. What follows are Goldman's snap thoughts on the Italian next steps.
“Right after OPEC, U.S. producers were very active hedging," said Ben Freeman, founder of HudsonField LLC, a boutique oil merchant with offices in New York and Houston. "We are going to see a significant amount of producer hedging at this levels."
Despite a small rise MoM, The Fed's own Labor Market Conditions Index has now deteriorated year-over-year for 5 straight months, despite significant upward revisions over the last 6 months, most notably in September and October. As Deutsche's Jo Lavorgan notes,"the upshot is that the economic outlook remains fragile despite the ostensible robustness of the labor market."