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4th Grade Press

And just like that, all of the good news trial balloons we got from McConnell on Monday (debt ceiling guarantee) and from Politico on Tuesday (tax reform moving ahead) were rendered null and void...

Ok, so on Tuesday evening, just hours after the dip-buyers thought they had gotten everyone back on the right track, Donald Trump held a rally in Phoenix and said this (among other things):

And just like that, all of the good news trial balloons we got from McConnell on Monday (debt ceiling guarantee) and from Politico on Tuesday (tax reform moving ahead) were rendered null and void because come hell or high water, Donald Trump is going to build his Mexican-be-gone wall.

The result: a decline that didn’t entirely negate Tuesday’s rally but a move that nevertheless underscored the extent to which markets are starting to grow wary of Trump’s antics:


“The increased prospects of a tax reform bill seemed to get most of the credit for the rally Tuesday,” Miller Tabak’s Matt Maley wrote in a note, adding that “at least some of that has gone out the window [and] reports that the relationship between the President and Senate Majority Leader McConnell has broken down badly” aren’t helping.

The S&P and the Nasdaq are on pace for their worst month since last October:


But don’t worry, if all else fails, the SNB is buying (h/t Kevin Muir):


Predictably, yields and the dollar dipped:


Treasuries caught an early bid and extended their advance into the close, leaving yields lower by 1.5bp-4.5bp across the curve with gains spurred by Trump’s govt-shutdown comments, which sparked a wave of haven demand at the start of the U.S. session,” Bloomberg recounts, before noting that the “Treasury move was also consistent with short covering after Tuesday’s sharp sell-off, spurred by Politico report that tax reform is said to be advancing.”

Haven flows were back as risk retreated on the prospect that Trump’s government-shutdown comments could potentially undermine tax reform – gold rose and JPY outperformed its G-10 peers.


The euro was strong throughout on the back of dollar weakness and this morning’s PMI data which continued to paint a relatively benign picture of the economic outlook across the pond. Oh, and Draghi didn’t try and jawbone it lower when given the opportunity at a speech in Germany.


Meanwhile, the euro is sitting near an 8-year high against the pound as Brexit trials and tribulations weigh on sterling:


Europe was lower across the board. WPP didn’t help – shares of the world’s largest advertising company collapsed 11%, good (or “bad” depending on how you want to phrase it) for the worst day since 1998.

Here’s a two-day of the Stoxx 50, the FTSE, the DAX, and the CAC just to show you that between the media malaise catalyzed by WPP, the stronger euro, and Trump’s bombast, yesterday’s rally slammed on the brakes:


Crude rose, buoyed by EIA data which showed U.S. inventories drawing for an eighth week (-3.33m bbl to 463.2m) to the lowest level since January 2016. Gasoline supplies -1.22m bbl to 229.9m. Production of course continues to rise. We’re now nearly back to levels we saw on Friday, hit after a truly absurd spike that came ahead of the rig count data:


Notably, no one knows what the fuck is going on in Libya at this point: “The flood of news reports makes it clear that the situation in Libya is still chaotic and that conditions in the country are still far from normal,” Commerzbank said in a note.

Generally speaking, this was a quiet day – to be expected I suppose given the time of year and Jackson Hole looming.

I think, today, I’ll close on a serious note for a change….

Presented without further comment:

“But the very dishonest media,” Trump continued, “those people right up there, with all the cameras.”

He was cut off by loud booing. He smirked and nodded in agreement. A few people shouted, “Fake news!”

A young girl in the crowd, who was wearing a white Make America Great Again hat, looked down at the handmade credential round her neck that stated in blue marker: “4th grade press.”



1 comment on “4th Grade Press

  1. How terribly embarrassing it must be for Republican congressional members. They seem unable to stand up for their own country and do what must be done.

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