(Shorter than normal this morning due to a cranky server… publishing in sections, so update after 8 AM Central for the whole thing)
Ever consider the “glass of water” problem?
You know…the one where people are “optimistic” if they look at a glass of water and exclaim “It’s half full!” Or, going the other way, if pessimistic, theey look at the same glass and say “OMG, the glass is half empty!!”
Well, that’s the problem Donald Trump has right now with the markets.
As you can see in our “only chart that matters” we are right on the ragged edge of having the whole stock market go from “Glass Half Full” to “Glass Half Empty.” If that shift digs in, the forecast of 2500 on the S&P 500 will not be the “worst case” – we could slip into a global trade war of the kind we had back in the previous Depression…
Fortunately, there’s not much movement likely today. Sure, we could slide a hundred, or more, on the Dow, but the real action will come later in the week. For one, we have producer prices tomorrow.
The kind of news events that could “flip things” includes the Fed. On the one hand, the Fed was sounding dovish a couple of weeks back, but now, the chance of a rate hike at the next Fed meeting seems to be back on the table. That meeting is next week – gavels in Tuesday and the “Santa Hike” — if there is to be one – would pop next Wednesday.
Trump’s also got problems in-house. Nick Ayers, who was the chief of staff for Mike Pence, says he’s leaving at the end of the year. What used to be a Trump problem is now over in the Mike and Don pile because Ayers would have made for a very smooth Trump to Pence transition, should the democrat controlled House roll with impeachment. Which, we notice, is really getting traction in the MSM press.
Note this data is through 12/03, so with the hype in the MSM is should be interesting to see how many “sheep” are driven to searches…
Then there’s Huawei and the matter of China – to us, it looks like a classic international standoff between “the factions” again, however..
On the one side, we see the global socialists – which includes the European Union (we saw how well that was going as in France this weekend, more than 135 were injured as 10,000 turned out to riot in support of lower taxes. As usual, though, the rioters don’t seem to understand the concept of “free lunch.” If you want a Nanny State, someone has to pick up the tab…
On the other side, the John Bolton, super hard-ass America was showing its stuff, too., Notable over the weekend, RT (Russia Today, on Galaxy 19 FTA circuits) was showing clips of Mike Pompeo talking about how America would again assert its global “leadership role” but that sounds like a threat if you’re one of the Global Socialists.
Which means, no kidding, Global Tensions are on the build – and that puts a tighter grip on the “glass of water.” Which can work out one of three ways:
First, the public could say ‘Half full” a while longer and the markets could bounce. Not likely, but that’s a chance…
Second, the public could “loose the faith” and roll with half empty in which case down we go to the 2500 level on the S&P.
The third choice is that the factions, fighting over the glass so much will simple break it. That would leave both sides with bloody hands (war) but that’s what flash points like Syria, Ukraine, North Korea (and so forth) are all about. Keep the bloody hands overseas and away from the centers of empire.
To sum it all up? Not much changed over the weekend. But that glass of water is sure looking like it’s in trouble.
In Other News…
Finally – a Russian collusion story? Moldova election campaign starts, some fear Russia influence.
Against this background,but the Dow futures battled back to flat with a half hour to the open.
Global Warming continues to fade – not only with the extended sunspot cycle lower than expected but with passing events like today’s Mid-Atlantic snowstorm brings one more day of precipitation.
Moron the ‘morrow… gonna go hit and git software issues…