A Relatively Quiet Day

Markets were generally little changed as politics and interest rates appear to dominate the conversation. Regarding interest rates, Fed Funds futures are all but guaranteeing an increase at the upcoming meeting. This outlook may change dramatically following Friday’s release of May’s employment data. I can argue if the data is considerably stronger than expected, the conversation will change to the probability of a 0.50% increase at an upcoming meeting.

Wow! Such a scenario has not been remotely discussed.

Speaking about not being discussed, until last Friday I read nothing about further production cuts from OPEC. The narrative was all about extending the status quo until December and maybe to March. To the best of my knowledge, there were no firms expecting greater production cuts.

The selloff in crude both today and Friday was blamed on the lack of further cuts in volume. Against this backdrop, if Friday’s job report surprises on the upside, perhaps the discussion of a 0.50% in the intermediate future is not as outlandish as it may appear.

And then there are politics. Like most, I do not know what to believe. Perhaps the accurate statement to make is almost the entire political establishment is against Donald Trump.

As a student of political science with an emphasis in international relations, “back channels” are necessary for realpolitik. Throughout modern history such has permitted a dialogue that in many instances may have prevented war. All administrations have utilized “back channels” and to condemn a vital and irreplaceable venue demonstrates the total ignorance of the person or group perpetuating such comments.

According to Facebook, 72% of adults receive their news via a social media, a venue that has no attribution. The potential for misrepresentation is gargantuan.

It is often written President Obama was the first president who utilized social media to win an election. President Trump is on steroids as compared to President Obama.

For what it is worth department, according to the polling firm FiveThirtyEight, Donald Trump has a higher rating than Bill Clinton had at this point in 1993. In early June 1993, Clinton’s approval rating was 37%. Today Trump is at 41%. Clinton tried to change the world and could not, so he changed. The economy also recovered.

Wow! Will history repeat itself?

What will happen today? In many regards, many blue-chip forecasters are extrapolating the last 8 years into eternity.

Last night the foreign markets were mixed. London was up 0.40%, Paris was up 0.22% and Frankfurt was up 0.44%. China was up 0.23%, Japan was down 0.14% and Hang Sang was down 0.16%.