Well, Friday was just Thursday all over again on the political front as lawmakers who refuse to legislate clash with a President who refuses to be any semblance of presidential.
Given that setup, there’s a certain sense in which the government shut down a long time ago, so maybe we’re all more prepared for this scenario than we thought – at least psychologically.
There were more analyst notes out on Friday regarding shutdowns, but I generally eschewed them today because the situation is so fluid that they could be out of date by the time they’re posted.
Additionally, Devin Nunes has been busy in the kitchen cookin’ up another smoke screen for Trump, this time in the form of a “secret memo” about the government abusing their surveillance power. Who the fuck knows what to make of that. I mean it comes from Devin Nunes and it was originally touted by Sean Hannity and then after that it was plastered all over a couple of popular alt-Right blogs. Meanwhile, as BI’s Natasha Bertrand notes, the Russian bot army is busy making sure it gets as much attention as absolutely possible and of course, Julian Assange is in on it. To wit, from “Russia-linked Twitter accounts are working overtime to help Devin Nunes and WikiLeaks“:
#ReleaseTheMemo is the top-trending hashtag among Twitter accounts linked to Russian influence operations, according to Hamilton 68, a website launched last year that says it tracks Russian propaganda in near-real time.
The frequency with which the accounts have been promoting the hashtag has spiked by 233,000% over the past 48 hours, according to the site. The accounts’ references to the “memo,” meanwhile, have increased by 68,000%.
The most-shared domain among the accounts has been WikiLeaks, and the most-shared URL has been a link to WikiLeaks’ “submit” page.
So you know, let’s just call this what it is, ok? It’s Devin Nunes doing what Devin Nunes has been doing since last summer and it’s the same brigade of Russian bots amplifying the message and yes, if you’ve noticed a growing tendency for popular blogs purportedly dedicated to finance news to lean heavily towards pushing this kind of thing well then do like Pee Wee and “connect the dots”. It’s all part of the same bullshit, circle jerk.
That doesn’t mean we won’t eventually find out some things we didn’t know about the government spying on Trump or on the Trump campaign. We probably will. And that shouldn’t surprise anyone. I mean “no”, no one with any sense wanted Donald Trump to be President so “yes” people were probably trying to figure out if he was breaking any laws or you know, conspiring with any hostile foreign powers. And if you’re wondering why everyone was so dead-set against him being President well, just look at what’s happened in the past 12 months.
Anyway, there’s that. Another circus on the political front complete with a government shutdown threat, a “secret document”, Russian bots, an angry Chuck Schumer, partisan gridlock, and a rage-tweeting Trump. Just par for the course these days.
As far as markets go, let’s start with this because it speaks for itself and in case it doesn’t, what it says is “just get me the fuck in!”:
Tom Lee has lost his goddamn mind, because on Friday he went out on a rather shaky limb to suggest that this run has some serious legs and by “serious” I mean Tom thinks it’s going to go for another 11 years.
I don’t even know what to say about that and if you watch the clip, it doesn’t look like anyone in the room knew what to say either.
The S&P was up for a third straight week and the eighth week in nine:
GE had its worst week since the crisis as a Deutsche Bank note out Friday dealt another grievous blow to the company’s beleaguered shares:
You already know the story with Treasurys or at least you should:
Meanwhile, the dollar did manage to rebound from declines seen early in the U.S. session, but ultimately, the BBDXY was down for a sixth week and DXY for a fifth:
You’ll want to keep an eye on the euro next week with the ECB on deck and amid the German coalition rancor. Needless to say, the common currency has had quite a run and one certainly wonders whether Draghi is going to take the opportunity to put the brakes on it:
Here’s BofAML with a bit of useful color on that:
We had a particularly busy week when it comes to ECB speakers. Summing up those interventions, we would highlight two important points. First, we have seen some concerns on the evolution of the FX (Villeroy de Galhau, Constancio). Second, rate hikes coming only in 2019 seem reasonable even for the hawks. To us, both points are closely related. We have argued before that the strength of the currency during the early fall of 2017 had a lot to do with fundamentals and hence there was very little overshooting. The move since then, without further divergence in terms of fundamentals, would constitute then an unwarranted tightening of monetary conditions. This is something not to worry about just yet, measured in terms of the EUR NEER we are not far from what the ECB assumed in the December forecasting exercise. But it will become an issue if the strength of the EUR continues.
Also, keep an eye on the pound which is still sitting near a post-Brexit high despite a pretty egregious retail sales miss in the U.K. on Friday:
This should be funny in light of recent events:
- TRUMP TO MEET WITH UK’S MAY AT DAVOS NEXT WEEK
Note the yen. Between speculation about the BoJ beginning to take the first steps towards policy normalization (or whatever counts as “normalization” in Kuroda’s mind) and the weakness in the dollar, USDJPY is doing this:
EM currencies rose to a seven-year high:
Crude posted its first weekly loss in five. Not helping matters on Friday was the IEA report which flagged explosive growth in U.S. production.
Things are going great on the equities front in Hong Kong, where the Hang Seng rose for a sixth straight week:
Finally, for your moment of zen, “look”…
White House Press Secretary Sarah Huckabee Sanders is trying to make you look pic.twitter.com/Zgh14iFRZL
— VICE News (@vicenews) January 19, 2018