Economic Calendar This Week
On Monday we have ISM Manufacturing, Wednesday 30Y mortgage rates, Thursday the Fed Funds Target Rate, and Friday the Producer Price Index. Slow manufacturing would add to the evidence that the current boom may be receding finally after 10 years. 30Y mortgage rates are likely to turn up, further slowing down the housing market. The Fed Funds target range won’t change, but other obscure interest rates such as the rate paid on excess reserves might be tweaked to get the Fed Funds rate back in line (it is currently a bit high for the Fed’s liking), and the PPI should give us further clues about inflation.
Bitcoin Cash Hard Fork, Altcoin Up 20%
Bitcoin Cash (BCH-USD) is undergoing another network upgrade on November 15th but this time not all developers are on the same page. Another hard fork is in the works and probably another argument about what coin is the “real Bitcoin”. Bitcoin Cash enthusiasts insists that Bitcoin Cash is actually Bitcoin and that Bitcoin (BTC-USD) is actually Segwit, whereas Bitcoin enthusiasts believe that Bitcoin is the real Bitcoin and Bitcoin Cash is just Bitcoin Cash. Now whoever is on the side of the upgrade will call the new Bitcoin Cash Bitcoin, the old Bitcoin Cash, Bitcoin Cash, and Bitcoin will still be Segwit, while those against the upgrade will call Bitcoin Cash Bitcoin, the New Bitcoin Cash Bitcoin Cash, and Bitcoin Segwit. Meanwhile, as damaging as this argument is to the mining community and to our ability to keep our grasp on crypto-nomenclature, Bitcoin Cash, AKA Bitcoin to some, is up 20% on anticipation of the hard fork. The only question remaining is, Who’s on First?
Asia Down Hard as Xi Get in a TiXi (Pronounced Tizzy)
Maybe no trade deal after all? Chinese President Xi Jinping seemed to lash out at President Donald Trump over the weekend, referring to his negotiating strategy as Law of the Jungle. “As globalization deepens, the practices of Law of the Jungle and winner take all are a dead end. Inclusion and reciprocity, win-win and mutual benefits are a widening road,” he said. Shanghai stocks are down but have regained much of their earlier losses, but Hong Kong is down hard at 2.33%, and Japan is down 1.55% on the day. This could signal the opening of yet another week of volatility.
Iran Sanctions Back On
Sanctions against Iranian oil exports have been put into effect, though oil (NYSEARCA:USO) has yet to respond to the new market environment. Oil is down 18% since the start of October and as Oilprice reports, new positions in crude are at 52-week lows, supply is about to be crimped or rather already is, and this is has been the sharpest one-month decline in oil since 2014. Spare capacity is down to 2% of global demand, so we are pretty much at peak capacity here.
Midterms Elections Set to Rock Markets
Midterm elections are tomorrow. Here’s your cheat sheet. If Republicans retain control of both houses, US indexes will likely rocket higher on the news. If Republicans lose the house as expected, there won’t be much net movement. If Democrats take control of both houses, stocks are likely to tank. Play the options as you will. Senate races to watch are Arizona, Indiana, Florida, Missouri, Montana, Texas, Tennessee, West Virginia, and North Dakota.