The President was Impeached, and the world continues on.
Will he be kicked out of office? Absolutely not.
But, what exactly does this mean for the markets?
It means that, once again, 'Wag the Dog' is in full swing. The economy is showing cracks every day.
Today continuing claims inched up to 1.722 million from 1.67 million a week ago. Initial jobless claims came in at 234,000. 9,000 more this week than expected.
Even Mohamed El-Erian said:
Another miss on jobless claims: 234k vs consensus expectation of 225k. Yes it’s v partial and noisy, but this is the fourth data point in a week suggesting that we should keep a close eye on the health of the household sector, the driver of the recent US economic outperformance.
— Mohamed A. El-Erian (@elerianm) December 19, 2019
Wednesday, mortgage applications fell 5% for the week even though the 30 year rate is hovering at 3.98%.
Philly Fed Manufacturing Index came in at 0.3! We were expecting 8, and last month it was 10.4
What is keeping this market up? Same...stock buybacks, and we are the only game in town.
The Bank of England Lowered U.K. Growth forecast again! The fourth-quarter growth is a pitiful 0.1%, even down from November's 0.2%
So, putting money into a system that isn’t growing isn't wise.
A recent Pew Research Center survey says “a majority of upper-income and middle-income are calling the economy excellent or good.” But, a majority of lower income people, 64%, think the economy is doing poorly.
I had the same feeling in late 2004 and early 2005 and the Dot com bubble is a distant memory for most traders. I felt like Gatsby in the Roaring 20’s until it all came crashing down.
When will the market wake up and see that the economy isn’t as rosy a picture that is painted for us?
Well it won't be this week as we all forget about it and we watch a story that is “a long time ago” in a galaxy that is “far, far away.”
This column does not necessarily reflect the opinion of the Benzinga editorial board.