You’ll recall that the title of our weekly wrap last week was “Different Week, Same Joke.”
Here’s what we said last Friday:
Another week and the same joke continues to apply: this was the worst week for the Trump administration since last week.
Well this week easily eclipsed last week as the craziest 5-day stretch yet for Trump and for an administration that has careened completely off the tracks. It was also a terrible week for stocks. Specifically, this was the worst week for the Nasdaq since January 2016.
Let’s just call it minus 1,500 on the Dow since the immediate knee-jerk spike post-Fed:
VIX highest since March 2:
Hide the women and children.
Since Monday, Trump:
- announced new tariffs on China eliciting an immediate response from Beijing and tanking markets from New York to London to Hong Kong as trade war threat morphed into trade war reality
- lost the lead lawyer on the Mueller investigation
- lost his National Security adviser
- suggested he was willing to fight Joe Biden
- threatened to veto a spending bill ahead of a government shutdown only to take it back hours later
Then, in a fitting end to a characteristically insane week, he held a press conference before signing the bill that he initially threatened to veto and used that press conference to talk up America’s military in a comically absurd rant the highlights of which include the following:
"Total stealth. They're hard to find, they're hard to see, therefore they're hard to beat. It's very tough to beat a plane when you can't see it." pic.twitter.com/yXBePQiOtD
— Dave Brown (@dave_brown24) March 23, 2018
Again – crazy. Completely, and totally crazy. No one has used that kind of language to talk about America’s nuclear arsenal since the goddamn Cold War.
Speaking of Trump and funny/ridiculous shit he’s said… the 200-DMA is your Frederick Douglass:
The 200-day moving average is an example of something that's done an amazing job and is getting recognized more and more pic.twitter.com/6CL3Fqmn1F
— Luke Kawa (@LJKawa) March 23, 2018
First weekly decline in five for the dollar:
10Y yields down markedly from the post-Fed reaction:
Worst week for Facebook since July 2012:
Dastardly week for banks:
IG credit at YTD wides (widest since September, actually):
IG CDS blowing out in Europe (60bps for the first time since last summer) and Xover widest in a year (give or take):
Horrible week for European banks:
Lowest in over a year for European stocks more broadly:
Oil capped off a good week with sharp gains on Friday. Comments from Al-Falih (who seems to think we need more price gains) helped and some folks are suggesting there’s a “Bolton premium” being priced in.
“It seems to be a bubbling cauldron again in the Middle East,” John Kilduff, a partner at Again Capital LLC said on Friday, adding that “that’s really helping to juice the geopolitical risk premium and the market’s gotten more volatile as a result”
FBR isn’t buying it. “John Bolton’s arrival as National Security Adviser, H.R. McMaster’s departure, and Mike Pompeo as Secretary of State will probably have only a limited impact on oil markets in the short-term,” Benjamin Salisbury wrote today, before acknowledging that while Bolton is a critic of the Iran nuclear deal, the impact is likely to be “muted” by a lack of international coordination.
RBC’s Helima Croft sees things a little differently, noting that Bolton is “a material risk” for crude, given his hawkishness. “While the market may take this development in stride, a more confrontational foreign policy could seriously test the assumption that U.S. shale can solve any global supply disruption”, Croft continued.
WTI near two-month highs:
USDJPY below 105 is a testament to the palpable angst:
Not a great week mainland Chinese shares:
Second-worst week for the SHCOMP since April 2016:
As the President would say/ask:
@realDonaldTrump "how's your 401k doing?"
— Heisenberg Report (@heisenbergrpt) March 23, 2018
“how’s your 401k doing?”
50% in cash since a year ago, thanks for asking 🙂
Is the Stable Genius having a nervous breakdown?
How can you tell?
Obviously political risk is high but it sure feels like there is something else lurking out there. Come on Walt, the Trump stuff is highly amusing but what the hell is going on?
What is going on is almost every market on this planet is terrified of this completely crazy assh*le.