Let’s see, where do we start with the crazy?
Tillerson held a press conference later in the day where he did his best impression of himself by staring at the floor and mumbling some scripted comments that, when they were some modicum of intelligible, sounded a lot like thinly-veiled criticism of Trump. Here’s the Russia comment:
Tillerson: "Much work remains to respond to the troubling behavior and actions on the part of the Russian government. … Continuing on their current trajectory is likely to lead to greater isolation on their part." pic.twitter.com/ca7eeSyl3r
— NBC News (@NBCNews) March 13, 2018
As you can see, he also sounded like he was out of breath, which is understandable.
Also out is Trump aide John McEntee, who apparently had to go because he’s under investigation by DHS for “serious financial crimes.” It’s not immediately clear why that’s a problem. After all, Jared Kushner and Trump himself are likewise under investigation for financial crimes that I’d be willing to bet are far more “serious” than anything John ever thought about doing.
As the New York Times notes, “the under secretary of state for public affairs, Steve Goldstein, was fired, and the status was unclear of Mr. Tillerson’s chief of staff, Margaret Peterlin, and his deputy chief of staff, Christine Ciccone.”
And then here’s Haberman (who Trump absolutely loves):
People close to the White House say they expect more major personnel shifts this week. An effort to rip off the bandaid fast on a number of fronts is likely.
— Maggie Haberman (@maggieNYT) March 13, 2018
More changes expected include a McMaster departure soon, as NBC recently reported. Among replacements, Tillerson had expressed concerns about working with Bolton.
— Maggie Haberman (@maggieNYT) March 13, 2018
Then, just a little over an hour before the closing bell, Politico reported the following:
President Donald Trump is getting ready to crack down on China.
Trump told Cabinet secretaries and top advisers during a meeting at the White House last week that he wanted to soon hit China with steep tariffs and investment restrictions in response to allegations of intellectual property theft, according to three people familiar with the internal discussions.
During the meeting, which hasn’t been previously been reported, U.S. Trade Representative Robert Lighthizer presented Trump with a package of tariffs that would target the equivalent of $30 billion a year in Chinese imports. In response, Trump urged Lighthizer to aim for an even bigger number – and he instructed administration officials to be ready for a formal announcement in the coming weeks, according to two people involved in the administration’s trade deliberations.
So yeah, the “Trump train” is now entirely off the tracks and just to top it all off, he flew out to San Diego to “inspect” those 8 border wall prototypes that are gathering dust in the middle of the desert. Here’s a video of his arrival:
— CBS News (@CBSNews) March 13, 2018
TRUMP: WITHOUT WALLS YOU WON'T HAVE A COUNTRY
i thought is was steel that was the key to being a country. now it's walls.
— Walter White (@heisenbergrpt) March 13, 2018
Yeah. It’s full retard, folks. It really is.
Meanwhile, markets were open and people were expected to try and trade around all of this crazy shit. The CPI print was inline with estimates and there was definitely a “Goldilocks” narrative to spin there but the only “Goldilocks” that mattered today was this one:
To let Evercore tell it, the Tillerson news is bad. “Donald Trump’s ouster of Secretary of State Rex Tillerson is negative for markets,” senior political strategist Terry Haines wrote in a note before continuing as follows:
Continuing staff “merry-go-round” highlights instability at White House [and] markets one day may become exhausted if the staff turnover and perceived White House instability continues. Trump and the administration will have some work to do to reassure markets.
Moving from Tillerson to Trump’s intended replacement, Mike Pompeo, can be viewed as another victory for the trade hardliners.
Pompeo brings to the table a harder-line national security background and bent that signals a fundamental shift in State’s role away from conventional negotiator and smoother of diplomatic difficulties to one that may be more confrontational on all sorts of relationships, including trade.
Changing out the head of diplomacy in the runup to the North Korean initiative is not reassuring.
Pompeo will have to be confirmed, and Congress may insist on hearings sooner rather than later. If so, those hearings will be very revealing for the short- and medium- term future of Trump foreign policy and so could be a market inflection point.
How does that sound to you?
Futures tell the story:
Nasdaq snaps a 7-session win streak, falling more than 1%:
The dollar was under pressure all day, although there were peaks and valleys around the various headlines, political and otherwise:
Treasurys bull flattened as the long end was supported by haven demand and a solid 30-year auction. Here’s 10Y yields:
Semis finally came off after shaking off the Broadcom/Qualcomm drama to trade at new highs.
Things definitely didn’t need to get any worse for GE, but they did anyway as JPMorgan said the company’s 2018 EPS target of $1-$1.07 is “disconnected” from its FCF guidance of 75c.
EIA forecasts for shale output in the U.S. continue to weigh on crude, which fell more than 1%.
The Tillerson news hit European shares hard, with the Euro Stoxx snapping a 6-session win streak:
It was all downhill after the Rex headline:
The stronger euro didn’t help:
It’ll be interesting to see what transpires in Asia overnight following Tuesday’s hard-ass Rexit.
Oh, don’t forget to fill out your bracket…