Going To The Mattresses.

Ok, so first of all, “Mueller Monday” did not disappoint.

Manafort and Gates were indicted on 12 counts including “conspiring against the United States” and on top of that, it turns out that George Papadopolous, a former campaign adviser to Trump, secretly pleaded guilty earlier this month and may have been flipped.

For Trump and his associates, it’s time to go the mattresses.

 

On our end, it’s time to rub some folks’ faces in it like you might a puppy you were trying to house break. And for that, we go to Jackie Moon:

Thanks, Jackie.

Obviously, this is terrible for Trump and despite her best efforts which were, as usual, quite remarkable considering the circumstances, Sarah Huckabee Sanders didn’t have much to offer in her daily propaganda press briefing.

As far as taxes go, Bloomberg reported that “house tax writers are discussing a gradual phase-in for the corporate tax-rate cut that President Trump and Republican leaders want – a schedule that would have the rate reach 20% in 2022.” That’s according to a member of the chamber’s tax-writing committee and a person familiar with the discussions.

That’s a real piece of shit headline, and it was greeted as such with the dollar and yields falling:

Dollaryields

On the Fed front, the New York Times says Trump is “set” on Jerome Powell. As usual, that comes with the standard disclaimer that Trump is out of his mind. To wit:

People caution that Trump is mercurial in decision making, yet expect him to go with Powell, who’s considered a safe choice.

Not a great day for small-caps which underperformed (not surprising given the tax headline and the Trump jitters):

Stocks

A flurry of competing headlines hit Sprint and T-Mobile shares (apparently the Nikkei story was news to T-Mobile):

  • SOFTBANK IS SAID CALLING OFF SPRINT, T-MOBILE TALKS: NIKKEI
  • SOFTBANK DOESN’T HAVE PLAN TO WITHDRAW FROM SPRINT TALKS: CNBC
  • T-MOBILE IS SAID TO STILL BE IN TALKS WITH SPRINT: CNBC

SprintTMobi

Two-year high for Brent as markets continue to be optimistic about production cuts and as things still haven’t calmed down sufficiently in Iraq.

Oil

Here’s some cautionary color from Bloomberg’s Benjamin Dow:

Brent’s rally is stepping into thin air, colleague Sejul Gokal writes in a technical analysis, and WTI investors may be getting that toppy feeling as the WTI ETF U.S. Oil Fund had its third straight week of redemptions last week.  If the market comes around to the belief that extension of the OPEC-Russia deal is priced in and the stop-start of Kurdish exports isn’t material to the global crude market (they can truck some cargoes anyways), the long-leaning market may turn south fast.

The IBEX soared on Monday as markets appear to be pleased that Madrid has managed to take control of the Catalonia situation without having to resort to (more) violence.  “There has been little violence so far which has come as a relief”, City of London Markets trader Markus Huber wrote in a note out today. The index is now back above its 50-DMA, 200-DMA:

IBEX

This was the second-best day for Spanish equities since the Macron bump:

IBEX2

The rest of Europe was mixed, but you do want to take note of the rally in Spanish and Italian bonds. The Bono/bund spread tightened by more than 6 bps while Italian BTPs rallied after Friday’s S&P upgrade.

Meanwhile, things are looking shaky in China, as rising sovereign yields are starting to weigh on risk assets with the SHCOMP suffering its worst day since the aftermath of “fire and fury” overnight…

SHCOMP

…and the Chinext (“China’s Nasdaq”) sliding sharply:

Chinext

The curve inversion (or something close to it) is starting to become a defining feature of the Chinese bond market and at some point, people are probably going to have to stop trying to come up with excuses for why that doesn’t matter:

ChinaCurve

Finally, Bitcoin definitely isn’t a bubble, so don’t worry about it:

Bitcoin

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