The pound is surging to a 7-month high after Boris Johnson secured a Brexit deal with the EU
- The pound is soaring after Boris Johnson, the UK prime minister, secured a deal with the European Union that would allow the UK to leave the trade bloc.
- On Thursday morning trading the pound shot up as much as 1.3% against the dollar and 0.6% against the euro, while Germany's DAX jumped 1% on the news and the FTSE 100 0.6%.
- Boris Johnson's team had been working with the EU in Brussels overnight on Wednesday to finalize an agreement that would suit both sides.
- In this agreement, Northern Ireland will remain part of the customs union with the EU, means that it can trade freely with the Republic of Ireland.
- The pound earlier this morning had sunk 0.5% against the dollar, as the hopes of a deal had diminished, so the news of a deal being agreed has sent the pound at one point to a seven-month high against the dollar.
Dow Futures Nervous as 25% Wipeout Looms If Trump Loses White House
- Dow Jones Industrial Average (DJIA) futures traded marginally higher on Thursday, pointing to a nervous stock market open.
- While traders are gripped by US-China trade negotiations, Brexit, and corporate earnings, there’s another worrying factor on the horizon: Trump losing the White House.
- Billionaire investor Leon Cooperman said yesterday that equities could shed 25% if Democrat Elizabeth Warren or Bernie Sanders took office.
- As Elizabeth Warren emerges as the new Democrat front-runner, traders have one more thing to be nervous about.
- Dow Jones Industrial Average (DJIA) futures swung in and out of positive territory in early morning trading Thursday.
- While emerging markets guru Mark Mobius echoed Cooperman’s comments, he also said the stock market faces risks under Trump.
- Elizabeth Warren tightened her grip on the Democratic nomination this week after a strong debate performance.
Evidence of market manipulation on the Chicago Mercantile Exchange?
- Three days earlier, in the last 10 minutes of trading, someone bought 82,000 S&P e-minis when the index was trading at 2969.
- That same day, President Donald Trump said he would postpone tariffs on some Chinese goods, and the S&P index moved to 3016, or up 47 points since the fortunate person bought the 82,000 e-minis just before the market closed on September 10.
- A week earlier, three minutes before the CME closed on September 3, someone bought 55,000 e-mini contracts, with the index at about 2906.
- Federal regulators might start here: In the last 10 minutes of trading on Friday, August 23, as the markets were roiling in the face of more bad trade news, someone bought 386,000 September e-minis.
- Three days later, Trump lied about getting a call from China to restart the trade talks, and the S&P 500 index shot up nearly 80 points.
Trump makes at least 12 false claims with Italian President
- "I am not aware that Trump can claim to have done anything for the state of the nuclear arsenal -- but nothing urgent needed to be done anyway," said Scott Kemp, director of the Massachusetts Institute of Technology Laboratory for Nuclear Security and Policy, who served as a State Department adviser on arms control early in the Obama administration.
- Regardless, there is no evidence for Trump's repeated claim that he was robbed of millions of votes in some manner or another.
- Facts First: We can't be sure what a general might have privately told Trump, so we'll give Trump leeway to recount this supposed story without repeating the claim in his own words, but it's clearly not true that the world's most powerful military didn't have ammunition, period, when he was inaugurated in January 2017.
Shoe companies Rothy's and Steve Madden are at each other's throats
- In August, after receiving a cease-and-desist letter from the venture-backed shoe startup Rothy’s, shoe giant Steven Madden filed a pre-emptive lawsuit asking a federal court to rule that its Rosy Flat shoes don’t copy design elements of the Point ballet flat that Rothy’s began selling soon after its 2016 launch.
- Among a handful of companies to tangle legally with the shoe titan in recent years is venture-backed Allbirds, which accused Steve Madden of copying its wool trainer in 2017.
- Meanwhile, Rothy’s just last month settled with a company, OESH, against which it had separately filed a patent and trade dress infringement lawsuit alleging its round-toe ballet flats are too similar to Rothy’s own.
- When we talked earlier this year with the venture-backed slipper-shoe startup Birdies, co-founder Bianca Gates noted that Target had already begun offering a similar slipper at a cheaper price point.
This is the weekly government report all traders should be watching
- Through the Commitment of Traders (COT) report, they it offers traders insight into where certain types of traders are positioned in the commodity markets.
- Those trading stocks could only dream of having information on which groups of traders were long or short a stock.
- For example, a trend trader might look to "go with the flow" regarding the beginning signs of speculators piling into a certain commodity, whereas, countertrend traders might look for signs of overheated markets ripe for a mean reversion trade in the opposite direction of the trend.
- We have noticed that markets swing like pendulums and as a commodity is peaking there tends to be an abnormally large long position held by large speculators in that contract.
- We have noticed the large speculator group in the COT report have amassed a near-record net long position in gold futures traded on the COMEX division of the CME Group.
Chicago Fed president says no more rate cuts necessary through 2020 because America's 'growth outlook is good'
- Chicago Fed President Charles Evans finds the last two interest rate cuts "appropriate," but doesn't see the need for additional cuts through the end of 2020.
- The central bank official voted in favor of the September 18 interest rate cut, but said "policy probably is in a good place right now" during a Wednesday speech in Peoria, Illinois.
- The nation's "growth outlook is good" and the central bank has policy prepared should inflation rise above desired levels, Evans said.
- Evans' sentiments clash with many Wall Street analysts who have already priced additional rate cuts into their 2019 market projections.
- Evolving economic risks could shift FOMC sentiments, and members recognize Wall Street's hopes for further action, Evans said.
- Though some hopes are high that the bank will pull its benchmark rate lower, Evans said the Fed can only do so much to boost markets.
Gold Price Avoids Punishing Reversal After U.S. Economy’s Biggest Driver Tanks in September
- The price of gold rebounded Wednesday after disappointing U.S. retail sales data raised serious doubts about the health of the consumer-driven economy.
- Futures on December gold delivery climbed to a session high of $1,495.50 a troy ounce on the Comex division of the New York Mercantile Exchange.
- U.S. retail sales – a key proxy for consumer spending that drives two-thirds of gross domestic product (GDP) – declined unexpectedly in September, the Department of Commerce reported Wednesday.
- Retail sales have declined in four of the past 12 months, raising concerns that the consumer-driven economy is beginning to decelerate in the face of a prolonged trade war with China.
- The long-term effects of ultra-low interest rates haven’t been studied thoroughly, but there’s a risk that central bankers are overstimulating a part of the economy that already got its life support following the financial crisis.
Fed Dissension Intensifies as Stock Market Bulls Bet on Rate Cut
- Evans is a voting member of the Federal Open Market Committee (FOMC), which meets in two weeks following two consecutive interest rate cuts.
- The St. Louis Fed president said this week that he would be comfortable slashing rates all the way to zero (though not into negative territory), alleging that global trade tensions had opened a “Pandora’s box” that could roil markets for years.
- According to CME’s FedWatch tool, fed funds futures imply a 90.3% probability of a 25 basis point rate cut that would bring the central bank’s target range to 1.5% to 1.75%.
- Nor does the market currently expect further interest rate cuts following the FOMC meetings in January or March, though there’s a 52.6% chance rates slide to a target range of 1% to 1.25% by April 2020.
Our relationship with trade is badly broken. Can we fix it?
- Trump argued that the American people had been getting a raw deal from decades of international trade, even while elites prospered.
- For 30 years, Trump argued, Democrats and Republicans alike promoted a free trade agenda that resulted in less prosperity for many Americans, while wealthy elites got richer and richer.
- Our leaders lost their way on trade, and until we acknowledge that the whole system needs to be reconsidered, we'll keep losing to Trump — even though the trade policies he has enacted continue to hurt the same farmers and steelworkers he talks about on the campaign trail.
- If every American has a financial stake in global trade relationships, if we're all playing on the same team again, trade will be easier to navigate and the economy won't be as prone to upheaval as it has been over the first three years of the Trump presidency.