Another day, another stick save. Had the 40-pt drop in futures that the Cohn news precipitated occurred when ES was already down 24 points, we probably would have seen 2662 tagged or even exceeded.
As “luck” would have it, the news hit after the markets closed — which is to say, after the earlier stick save. Note the fortunate timing of VIX’s reversal (the yellow arrow.) Since the Cohn news, both VIX and USDJPY have been heavily managed. The 44-pt overnight drop has been pared to 19. VIX’s shot across the bow at 5:31am and USDJPY’s ongoing recovery are an insistent reminder to would-be bears that all is well in the “market.”Speaking of Cohn, would the last grown-up to leave the White House please turn off the lights? My jaw hit the floor when I read about the likely replacements: Peter Navarro and Larry Kudlow.
Peter Navarro is the guy who, when he was appointed head of Trump’s Trade Council last year, prompted The Economist to describe his views as “dodgy economics.” No doubt he’s really, really good at telling Trump what he wants to hear. But, wouldn’t it be better if he were good at telling Trump what he needs to know?
Larry Kudlow — you either love him or hate him, depending on your politics and your views on supply side economics. But, he’s the guy who in May 2008 insisted the impending Great Financial Crisis was a “non-recession recession.” Probably enough said about that.
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