It has gotten to the point where traders, like most reflex-based creatures, have become accustomed to the seemingly daily Trump “bombshell” news to emerge just after 5pm from either the WaPo or NYT. So much so, in fact, that when there is none – as was the case overnight – they to complain.
Case in point, JPM’s daily market wrap, in which the bank;s Adam Crisafulli asks rhetorically “what’s happening this morning?” And answers “not a whole lot. Once again there weren’t any major Trump bombshell headlines.” Of course, the flipside is that just like the market has gotten desensitized to Trump’s tweets, so the daily barrage of “sources say” stories from the seemingly co-joined NYTWAPO is having a progressively lesser impact on either the market or Trump’s impeachment odds. And once the public habituates to the media’s “Russian connection” story, what else is there?
While we ponder that, here is JPM’s latest market wrap:
Market update – Asian markets generally ended higher while Eurozone stocks and US futures aren’t doing much more than trade flat.
What’s happening this morning? Not a whole lot. Once again there weren’t any major Trump bombshell headlines. The Moody’s d/g of China (“for the first time since 1989”) is getting a lot of attention in the media but not from investors (the SHCOMP opened lower but rallied throughout the session and closed flat). It sounds like OPEC will delay the production agreement for 9 months although there are some conflicting headlines (there are some still pushing for 3-6 or 12 months); crude is up small so far this morning. Fed’s Harker warned that another bad inflation number could lead to a pause in tightening (although he still thinks a June hike is likely); note that minutes from the 5/3 FOMC meeting will hit at 2pmET today. The UK raised its terror threat alert level to the highest possible point. There wasn’t any major eco data out Wed morning. INTU and TCS both reported solid earnings in the US Tues night; in Europe Kingfisher is getting hit while Dixons Carphone catches a bid (both had earnings). Media reports are pointing to a price cut from Safran for Zodiac. Toshiba shares jumped ~8% following Japanese media reports pointing to a $18B bid from WDC for the semi business; Toshiba and WDC execs will apparently meet later on Wed.
Calendar for Wed 5/24 – the focus will be on US FHFA home prices for Mar (9amET), US existing home sales for Apr (10amET), GE’s presentation at EPG (Immelt at 11:30amET) , minutes from the 5/3 FOMC meeting (2pmET), two Fed speakers (Kaplan and Kashkari), the CBO score of the House healthcare bill (due out Wed), some analyst meetings (including AMAG, DV, and TSS), earnings (AAP, CHS, EV, LOW, and TIF pre-open and CSRA, GES, HPQ, NTAP, and PSTG after the close), and conferences (EPG, JPM TMT, and UBS healthcare).
Eco data/monetary policy – there wasn’t any major eco data out Wed morning. The US Architecture Billings Index (ABI) fell to 50.9 in Apr (vs. 54.3 in Mar). Germany’s GfK consumer confidence for June came in at 10.4 vs. the St 10.2. Bloomberg notes some friction among senior ECB officials when it comes to the exit strategy (https://bloom.bg/2rPOjzh). The Reuters Tankan survey finds large firm sentiment staying upbeat in May (http://bit.ly/2qVx9QE). Bernanke said the BOJ may need to coordinate w/fiscal authorities in Japan on a new plan to lift Japan’s inflation above 2%
Trump budget opposition comes not only from Democrats but Republicans too. “Steep cuts in Trump’s budget proposal don’t sit well w/many in GOP” (http://wapo.st/2rSCszB) and “bipartisan pushback greets Trump’s budget” (http://on.wsj.com/2rz9NTr). Meanwhile, some of the “fuzzy math” contained in the Trump budget sparked a backlash – “all presidents fudge the numbers. But this one represents a new level of deception” (http://politi.co/2qiR7mr) and “economists see little magic in tax cuts to promote growth” (http://nyti.ms/2qOqauc).
Trump/Russia – no bombshell headlines overnight but a few factors are in focus:
- Trump/Russia – former CIA director John Brennan said the CIA noticed last year a series of suspicious contacts between Russian gov’t officials and associates of Trump’s campaign. Brennan doesn’t know if the Trump campaign deliberately colluded w/Russian operatives. NYT http://nyti.ms/2rNUrrN
- Trump retains outside lawyer Marc Kasowitz to help with Russia probes – Washington Post. http://wapo.st/2qiUJ7T