Will Today Be A Day Of Great Significance?

Today can be a day of great significance. The outcome of the British election will be known. The ECB decision will also be announced. And then there is Comey’s testimony. The newswires are declaratively stating this is perhaps the highest profile testimony in decades.

As noted the other day and according to the Real Clear Political average, President Trump’s ratings are higher than President Clinton’s ratings at this stage in his presidency. Gallup has the two tied.

President Clinton’s rating rose at the end of June. Will President Trump’s ratings follow the same path?

To write the insanely obvious, if Comey’s testimony is of great significance, Trump’s rating will fall. However, if the hearings are a nonevent and if economic activity accelerates, Trump’s rating may improve.

Against this backdrop, perhaps the only certainty to write is this… anything less than a bombshell accusation would help Trump given the hype and speculation of today’s hearings.

Many times I have commented about the immense market imbalances. I thought yesterday’s WSJ placed this imbalance into proper perspective when it stated the S & P 500 technology index—propelled by just five stocks—is up 21.1% YTD. The Russell 2000 is up 2.8%.

In my view, today’s imbalances are greater today than in 2000 and the hype surrounding NASDAQ 5000.

Will today end ugly? Janus’s Bill Gross stated the risk in the market is at the highest level since before the 2008 financial crisis, partially the result of central bank polices for low and negative interest rates that are artificially driving up some asset prices while generating little growth in the real economy.

Last night the foreign markets were mixed. London was down 0.05%, Paris was up 0.40% and Frankfurt was up 0.49%. China was up 0.32%, Japan was down 0.38% and Hang Sang was up 0.34%.