Thursday we going fine until Yellen decided to comment on the Fed reducing its balance sheet that it had accumulated to prop up the economy. What timing. Rather than making a statement after hours on a Friday when the markets could digest it properly, Yellen decided that she might as well spook the markets with her announcement.
And the markets tanked, especially the Nasdaq.
Then if that was not enough our esteemed Senators, never to be outdone on the get nothing done side, could not muster enough votes to pass even a partial repeal of Obamacare. 1 short this time. 3 Republicans voted no, 2 of which had voted for a full repeal many times over the Obama term.
So, where does Health care go from here? Who knows. It is obvious thought that DC will not fix it. Or should I say will not and can not.
The market has digested this vote and it is gapping down this morning. Although, much less than I would have thought. If you think there is any chance at a wall, tax cuts, infrastructure or any other major item that was on Trump’s agenda, think again.
It’s war and until things change at the voting booth nothing will change in that regard.
So, perhaps this is the start of the downswing I have been predicting:) We are entering the perfect storm, with the Fed being less accommodative, Congress not solving problems, and outright war between Congress and the Executive branch.
And I have not mentioned the histrionics out of the executive branch that is a daily soap opera. This just adds to the chaos. The only good thing is if you can call it that, is that Trump is used to chaos. He thrives in chaos. So perhaps he will still be able to get something done without Congress. We will see.
Looking over the betting odds on health care the odds are now 50 to 1 against a Health Care bill out of the Senate by August 15th! I had almost given up on my prediction of a no vote back when you could get odds. So my prediction can in on this one, at least so far.
Now let’s take a look at Wray. The odds of Wray being confirmed by the end of the day today is sitting at 9 to 1 against. So far my delusional index is staying very low. When I start missing these I will need to double check it:)
Not much else on the odds table that looks enticing. Priebus is a 2 to 1 favorite to beat Sessions out the door. That seems a bit low to me but not enough to think about betting it. Should be more in the neighborhood of 3 or 4 to 1.
As far as Sessions, his fate most likely will hinge on how he reacts to the House demanding a 2nd special counsel to investigate Clinton, Comey, Unmasking, and Leaks.
As if there is not enough mayhem in the political sphere this came out in the news yesterday afternoon.
My guess is Sessions will appoint a special counsel and soon. Most likely in the next few weeks if not sooner. As far as the odds….let’s say right now 3/2 in favor.
So I ask, with the above political background, do you just feel an urge to get all your assets working in this market:)
I am sticking to short term swings until things change a bit. The event risk is enormous right now. You have Brennon, former CIA head, calling for a coup, Holder, former DOJ head, telling DOJ and FBI employees to hold tight for a little while longer and now Gore, former presidential candidate, said yesterday that things will happen in the next 2 months that will challenge the American people.
Not exactly sure what all that means, but, take heed and be cautious in these markets right now.
I will post any trades this morning on my private twitter feed @rickjswings.