Everything is Down Again
US stock futures, Asian (except Japan), and European equities are all down today, together with oil yet again, in what is now a record slide in intensity. The US Dollar is flat. The S&P 500 is now decisively below its 200 day moving average. Italian bond are down again this morning, up to a yield of 3.54% after its government has refused to revise its profligate budget as per the demands of the European Central Bank, which almost singlehandedly finances the Italian state budget, for about another month or so. Almost all European stock indexes are down at least 1% today, the exception being the FTSE 100 in the United Kingdom, down only 0.9% in the early morning hours. In the US, the Nasdaq leads the decline in futures once again, set to open close to a full percent down as well. This, after staging an early morning rally yesterday that faded to no gain by the end of the day, negating a two-week rally that had traders believing that the bottom was in.
(NASDAQ:QQQ) (NASDAQ:EUFN) (NYSEARCA:SPY)
UK PM May To Present Brexit Plan to Cabinet Today
Today we will get an initial indication as to how much fighting United Kingdom Prime Minister Theresa May will have to do in order to get her newly agreed upon Brexit deal to get smushed through her government. It won’t be an easy feat, and if she loses, she may be unseated by her party and may have to face new elections, which could further put European equities into a tailspin, which wouldn’t be good for the sovereign debt situation either. Basically we are at a critical point here and a wrong move could severely upset market balance throughout the continent, which may end up spreading globally since weakness seem to be cropping up everywhere and coming out of the woodwork. No pressure though.
Trump Trouble Ahead?
In yet another potentially destabilizing political tempest on the horizon, there are signs that US President Donald Trump may soon be cornered by the Mueller investigation. As Reuters reports, a bill to protect special prosecutor Robert Mueller from any politically motivated firings is being circulated in the Senate and has gotten support from Senator Lindsey Graham specifically, a frequent Trump critic. If the Senate passes such a bill it could mean that both houses of Congress are gunning for the president, the House obviously because it is now majority Republican, and the Senate because, well, why not. It’s filled with establishmentarians and Trump is not that. If Trump does get impeached before the next elections, it would almost certainly hammer markets down all the more so.
Here’s Something That Could Give Oil a Shot in the Arm…or Head
Lindsey Graham, that Senator from a paragraph earlier, is also gunning for Saudi Crown Prince Muhammad Bin Salman, who he calls “unstable and unreliable” in the wake of the murder of Saudi expatriate and Washington Post columnist Jamal Khashoggi. “I am of the opinion that the current leadership, the MBS leadership, has been a disaster for the relationship and the region, and I will find it very difficult to do business as usual with somebody who’s been this unstable,” he said, according to Bloomberg. On the murder itself, he continued, “Pretty hard for me to believe that 15 people just on their own fly to Turkey and chop somebody up in a consulate and never tell anybody in Saudi Arabia about it. I’ll be shocked if that turns out to be true.” Fellow Republican Senators are demanding high level meetings about what happened there, and threatening to pull Saudi-related votes away from the President if they are not briefed on what exactly is going on. If the Senate does vote for sanctions against the oil kingdom, oil prices will quickly reverse even faster than they have fallen since October, and the unstable bin Salman will be wholly outdone by the instability of global oil markets.
