The Stock Market is hovering around the 0 line this morning about 30 min before the open.
TLT up slightly, Oil and Metals up slightly and financials mixed this morning.
To me, this looks like a neutral open. This is not surprising as we have had quite a runup in the markets.
Right now it appears that the market is going to consolidate before another move higher. Although, news can change that on the dime.
The news this morning is positive on the economy from with GDP at 3.1%. That is above expectations. However, we are now at the point where the markets will consider interest rate hikes when you get positive economic news. I have seen this cycle before, and usually, the negative reaction is short lived.
On the political front, Dershowitz is stating that the Special Counsel is working up a subpoena for the President to testify in front of the Grand Jury.
This is not small news. This has a variety of implications. The most interesting is that the right of the special counsel to subpoena the President will be heading up to the Supreme Court.
However, the Supreme Court has a 4-4 balance as a 5th Justice has not been confirmed yet. Hearings on the confirmation begin early September and you can count on the Democrats doing everything they can to stall or defeat the nomination.
Stalling has the benefit of having the Supoena issue decided by 4-4 Court. But, even if the appointment goes its normal course, and appointment seems certain, it’s not clear the President’s Attorneys can stall out the appeal, to assure 5-4 Court.
One thing is certain is that all the players in this drama are well aware of the Supreme Court issue.
As an aside, to me, this will make the confirmation of Cavenaugh a bit more uncertain. Once the Supoena is in the works, the never Trumpers of the Senate Republicans will be taking a serious look at voting yes.
They will have to decide between the advantage of having a solidly conservative Judge and a 5-4 balance for years to come against their chances of removing Trump.
It will not be an easy decision for them. Especially, with the money that will be flowing into their coffers to vote no.
That is U.S. politics right now. Not a pleasant sight for a country that used to be a model of Democracy for the World to follow:)
If things go down this route, I suspect we will get a lot of market volatility, especially if it appears the President is going to be forced to testify.
For potential positive news, we have the Canada trade deal in the works. Something tells me it’s going to be a bit more difficult to work out than the Mexico deal.
Canada has allied more with the E.U. who is becoming more hostile to U.S. interests daily.
If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. Typically I talk about the overall day expected with the markets and also give some levels on the ES and NQ for failed breakout scalping.
It’s my private twitter feed for the stock market and its free. Sports Handicapping is the subscription-based part of this site. But considering the cost of joining it’s almost free:)
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