It's been very exciting.
Back on the 13th, I titled the morning Report: "Which Way Wednesday – S&P 2,500 or Bust!" and we've been teasing the line in the subsequent two weeks but now failing again as oil prices rise ($52 this morning, which is our new shorting line!) and Global tensions mount. Meanwhille, on the home front, the Republican agenda is failing in a most spectacular fashion as repealing Obamacare simply isn't going to happen (thank God!) and now they are far over-reaching on Tax Cuts, with a plan that will add Trillions of Dollars to the National Debt with no offsetting spending cuts – all just to benefit the Top 1% – it's not going to fly either.
The markets are still wildly underpricing the overhanging threat of war in North Korea. We are, in fact, still at war with North Korea – having never signed a peace treaty since that war started in 1950. Meanwhile, back in the middle east, Turkey's President and Trump Thunder Buddy, Erdogan has threatened to invade the Kurdish region of Iraq as he is enraged by their vote for independence (Turkey also has a larget Kurdish region so he considers it a bad example).
Key to this conflict is a major oil pipleline that runs from Kurdish Iraq through Turkey which Edrogan threatens to cut off (hence the jump in oil) as well as warning: "“Our military is not (at the border) for nothing. We could arrive suddenly one night." We need to take Edrogan seriously – this is the guy who had his security detail beat the crap out of protesters in Washington DC and again in New York – even after he was told what they did in DC was not acceptable.
Janet Yellen will speak this afternoon at 12:45 and MIGHT seek to clarify Fed policy moving forward but is more likely to remain enigmatic – since that seems to be working. As I noted yesterday, we have a dozen Fed speakers this week and, last night Neel Kashkari came out on the dove side, saying he thought it was far too soon to raise rates. Nonetheless, the markets have flattened out in pre-market trading so far…