Good, Bad, Ugly Chart
What’s in Today’s Report:
- Good, Bad, Ugly Chart
Futures are modestly lower as investors digest yesterday’s failed attempt at a new all-time closing high.
Trump headlines dominated the newswires overnight although the legal developments regarding Cohen and Manafort do not alter the broader, positive backdrop for stocks.
Oil futures are up over 1% after the API reported a -5.1M bbl supply draw late yesterday, more than doubling analyst expectations of –2.0M ahead of today’s weekly EIA release.
As far as catalysts go today, the media will likely be fixated on the Cohen/Manafort drama (more on that below), but there is one economic report to watch: Existing Home Sales (E: 5.420M) and the FOMC Meeting Minutes from Aug. 1 are due out at 2:00 p.m. ET.
Regarding the Trump headlines, while they will likely dominate the media today, they are not a material headwind on stocks at this time for three reasons.
First, proof of criminal activity needs to appear (right now, it’s he-said-she-said).
Second, impeachment is a political process and even if Democrats won the House and Senate, they will not get close to the 2/3rds needed to remove a President.
And third, there’s no critical legislation that this news can derail (tax cuts already passed).
If anything, this weakens Trump’s leverage on trade and makes a compromise slightly more likely. As such, the dramatic political headlines from the last 12-18 hours will not have a material influence on the markets, at least at this point.
