Futures are Up, But May No Confidence Vote Could Roil Markets
Stock futures are up early this morning, with the tech-heavy Nasdaq (NASDAQ:QQQ) bouncing over 1% higher in the premarket and the S&P 500 (NYSEARCA:SPY) and Dow (NYSEARCA:DIA) not too far behind, but there could be a fly in the ointment here. News came out of the United Kingdom today that Prime Minister Theresa May will be facing a no confidence vote today, between 6pm and 8pm British time. That means by the time the vote is complete, it will be 3pm at the latest in New York. If May gets voted out, the chances of a no-deal Brexit go up, and that could seriously churn markets . Plus, in 6 days we will have the Federal Open Market Committee decision on overnight interest rates. A rate hike may actually propel equities higher, briefly, depending on the tone the Fed sets in its press conference regarding future hikes. There is a good chance will signal that this coming rate hike will be the last one in this cycle. We’ll see in a week.
Government Shut Down Here We Come…Again!
It was a dark and stormy night in the oval office, or day, depending on when it actually happened, as two top congressional Democrats Pelosi and Schumer went 2 on 1, manos a mano, with President Trump, and the two sides couldn’t agree on Mexican border wall funding. So Trump reportedly offered to take responsibility for any government shutdown that would ensue as a result. The shutdown would be partial and Trump might go for it, considering stocks are already very choppy. If he can blame the Democrats for any plunge by pinning the shutdown on them in a negative equities environment, he’ll probably take the opportunity, so suit up. It doesn’t look like the volatility is going to end any time soon.
Credit Suisse Announces More Free Money To Shareholders As Stock Near All Time Low
This makes sense, in a nonsensical sort of way. Credit Suisse (NYSE:CS), the Swiss Bank that has been struggling mightily along with the rest of the European banking complex, has promised shareholders higher dividends and buybacks, and this as its stock has floundered near all time lows with anemic attempts at rallies for the last three years. The European banking system is an unmitigated cacophonous mess, with banks all over the Eurozone and out of it (UK and Switzerland) leveraged up the wazoo in government debt securities and the entire area under threat of a liquidity crunch if and when the UK decides to leave the European Union without a deal. But yeah, higher dividends. That’s nice, we guess.
French PM Macron Solves Riot Problem By Making It Harder For French To Get Jobs
The French have been rioting about taxes for weeks now walking around in those reflective yellow vests you’re supposed to wear when changing a tire at the side of the highway so people don’t run you over, and French Prime Minister Emanuel Macron has finally decided to take action by making it even harder for French citizens to find employment. Some of the rioters actually appear happy about this. Macron will raise the minimum wage by 100 Euros a month and pile on even more debt on taxpayers by increasing spending and cutting taxes, in a combined move that should cost the county $11 billion, which, in accordance with current thinking, will never have to be repaid, but it actually will. The unemployment rate in France is a very high 9.1%, and will probably go higher as the minimum wage hikes take effect. (NYSEARCA:EWQ)