FBI director James Comey cleared Hillary a second time on Sunday. For details, please see FBI Director Comey Announces No Action Against Clinton Over New Emails; No Evidence?
For now, the market seems to like the news.
S&P futures are up 26 points, treasury futures are lower, gold is lower, the Yuan is lower, and the US dollar is up in early Monday morning futures trading.
Yuan 30-Minute Chart
Gold 30-Minute Chart
Two-Year Treasury Yield 30 Minute Chart
S&P 500 30-Minute Chart
Why does the market seem to love Hillary? Because Hillary is beholden to Wall Street and neocon war mongers.
Mike “Mish” Shedlock
Too little too late?
Wootend mentioned the futures spike on the last post “FBI Comey”, to which I answered, “I looked @ 6;00 PM and it was only up 9… don’t worry, it won’t last long”. After thinking about it a while, now it seems to be screaming for a Clinton win and a neutered FBI…. corruption is on the auction block free to the chosen few.
Mish: FYI there was a good article on Bloomberg last week showing how “hedge funds” were heavily levered in two types of trades. One group is short volatility (risk parity, long/short, etc) and the other group is long volatility (trend followers, CTAs, macro, etc) — with both groups betting on election outcomes and on the next Fed meeting.
It doesn’t matter which group is “correct” on either point. The massive leverage combined with the short vol’s need to hedge negative convexity (remember the MBS fiasco?) means any movement, either direction, gets exagerated.
So curious why anyone thinks the market “likes” or “dislikes” the Comey announcement. It adds uncertainty (or perhaps postpones the uncertainty?).
No matter who “wins” the election, a special prosecutor will be needed. Trump obviously will want an investigation, but would need to avoid being corrupt like Clinton. And just as obvious, Clinton cannot investigate herself (and will be unable to govern until the matter gets resolved). Guessing the final outcome of a special prosecutor is tough (especially after Comey’s bias), but such an investigation will take lots of time.
Clinton will be a lame duck for the first year (at least) if she wins. Trump will need to deal with a leadership disaster at the FBI if he wins. Neither candidate will be able to move forward agenda with this corruption hanging over the entire government. Congress is filled with members (both parties) who cannot confirm a cabinet member for the other team with this unresolved. And every single foreign leader is going to know the incoming administration has its hands tied.
Far from settling anything, Comey just put the next administration (whichever one) on ice for at least the first year. Winning the election is one thing, governing afterward is another. Neither candidate will be able to govern (maybe Trump is in a slightly better position on this, but emphasis on slight)
Could it be that fundamentals really do matter? It seems in this case it does, the fundamentals of crony capitalism at least.
“Why does the market seem to love Hillary? Because Hillary is beholden to Wall Street and neocon war mongers.”
I don’t disagree, but I think it has more to do with the fact that Hillary is a known commodity, whereas Trump is a giant question mark. Markets hate uncertainty.
Clinton will continue the policies every president has followed since Reagan. That will ensure high corporate profitability. Market likes profits.
What an amazing period in the history of the United States.
We were always told that every vote matters because a single vote can possibly decide an election.
And wonder of wonders it has turned out to be true in 2016 where the vote of a single man has decided an election, a man who first voted for HRC, and then DJT and then finally for HRC a second time … after accepting HRC’s revised bid, which trumped Trump’s bid.
Sigh.
Clinton was going to win either way, don’t kid yourself.
It’s a little bit reminiscent of NSA chief James Clapper. First, “we don’t collect private data of US citizens”, then we do.
Which is it? What is the truth of the matter? How often does it change, Mr. Clapper?
A brief pop and then after the election, the slide will continue.
“Why does the market seem to love Hillary? Because Hillary is beholden to Wall Street and neocon war mongers.”Maybe.
Trump’s talk of “renegotiating” treasury debt, and his vows to abrogate international trade agreements, among his bad economic proposals, have something to do with it, too.
Still, it is not his economics that disqualify him, nor the prospect of a market tantrum. Rather, it is his authoritarianism and nativism and scapegoating and race-baiting that make me NeverTrump.
The whole system is rigged. Here is another WikiLeaks dump that is being reported overseas but not here –
“DNC staffers prepared CNN anchors Wolf Blitzer and Jake Tapper for interviews with Trump, new batch of 8,000 WikiLeaks emails reveals” – Daily Mail UK
http://www.dailymail.co.uk/news/article-3912164/Latest-Wikileaks-dump-8-000-new-emails-shows-DNC-prepared-anchors-Wolf-Blitzer-Jake-Tapper-interviews-Trump-Cruz.html
Blitzer?
All you need to know about him …
Comey would have known the markets would slump after his first letter to Congress. He also would have known the markets would rally after his second letter. Given that he didn’t have to write any letters at all, nor say anything publicly about ongoing investigations, and nothing in fact changed, the market response is suggestive of his motivation. Anyone with insider knowledge of Comey’s actions could have made a fortune, and that includes himself, anyone he told about the letters, and the direct recipients of his letters. The question is if anyone actually did profit unfairly from Comey’s charade? How can we know? I think this kind of nonsense has happened before, in association with other October Surprises, and if that was the actual motivation behind Comey’s actions, then we need to find out.