Reservoir Dogs.

The political drama gripping America continued apace on Thursday, as the Trump administration tried desperately to sort out who said what to who and critically, who Michael Wolff caught on tape.

the Trump administration is turning into that scene out of Reservoir Dogs where everyone is trying to figure what the fuck is going on…https://t.co/SiUKyPFGxg

— Heisenberg Report (@heisenbergrpt) January 3, 2018

This, in brief, is the problem (from a piece by Wolff published today by The Hollywood Reporter):

There was, after the abrupt Scaramucci meltdown, hardly any effort inside the West Wing to disguise the sense of ludicrousness and anger felt by every member of the senior staff toward Trump’s family and Trump himself. It became almost a kind of competition to demystify Trump. For Rex Tillerson, he was a moron. For Gary Cohn, he was dumb as shit. For H.R. McMaster, he was a hopeless idiot. For Steve Bannon, he had lost his mind.

And this, friends, is what panic sounds like:

• TRUMP ATTORNEY SENDS BANNON CEASE AND DESIST LETTER, ABC SAYS
• TRUMP ATTORNEY SENDS AUTHOR WOLFF CEASE AND DESIST LETTER: ABC
• SANDERS SAYS PHONES TO BE BANNED FOR WEST WING GUESTS, STAFF

Meanwhile, Jeff Sessions isn’t going to win any popularity contests for this ill-advised decision:

• AG SESSIONS TO RESCIND LEGAL MARIJUANA POLICY: AP

“Don’t worry”…

 

I’m not sure we’d call it a “freakout” (man), but the ETFMG Alternative Harvest ETF (the first US-listed, pure-play weed ETF) did take a hit (get it?) before recouping some of its early losses:

Meanwhile, the Dow crossed 25,000:

And guess who’s excited?

Dow just crashes through 25,000. Congrats! Big cuts in unnecessary regulations continuing.

— Donald J. Trump (@realDonaldTrump) January 4, 2018

Now if only the people who voted for him actually owned any stocks…

(Deutsche Bank)

Despite the blizzard, folks were trading with volumes up sharply through midday:

Does this mean investors can now go to cash without giving up income?..

Treasurys were mixed on the day, but there was of course more of this:

TREASURY 5Y-30Y SPREAD TOUCHES 51.4BP, LOWEST SINCE 2007

— Heisenberg Report (@heisenbergrpt) January 4, 2018

Or, visually:

The dollar resumed its slide, as everyone weighs a continuation of upbeat growth abroad against the possibility that tax reform in the U.S. will generally underwhelm when it comes to boosting the greenback:

As usual, all eyes will be on AHE when the jobs report hits Friday.

The euro resumed its ascent on Thursday and you should remember this:

this: Weaker USD May Make It Even Harder for ECB to Normalize

yes.

— Heisenberg Report (@heisenbergrpt) January 4, 2018

The stronger the euro, the more gun shy the ECB has to be lest they should inadvertently catalyze further strength in the common currency and thereby undermine the progress they’ve made on the economic front.

That said, FX strength didn’t derail European equities on Thursday. Thanks in no small part to still more upbeat econ, stocks across the pond had a veritable barnburner of a session and even as the FTSE underperformed, it still hit a record high:

The MSCI EM FX index, riding high thanks to the beleaguered dollar and the commodities rally, rose for a 10th consecutive day. That’s the longest stretch in seven years. It’s up 20% from its January 2016 low (that was back when oil was plunging and China risk was rearing its ugly head) to its highest level since 2013:

Four-month high for the yuan by the way:

Oh, and if you missed it early this morning, Japan came back from the long break ready to buy some damn stocks.

The Nikkei soared a truly incredible 3.3% on Thursday. That’s the best gain in more than a year and marks the best start to a year since 1996:

Just so we’re clear, we’re looking at a 26-year high on the Nikkei. And if Abenomics doesn’t work, well don’t tell equity investors:

Finally, for your moment of zen, here is Sarah Huckabee Sanders quite literally playing a propaganda video of Trump at today’s press briefing…

Today's 1984/Wizard of Oz hybrid is off to a wild start …. pic.twitter.com/yJT8hC6JV5

— Josh Marshall (@joshtpm) January 4, 2018