Nothing-Burger, Side Of Suspicion?

Thursday, June 8th, 2017

The fireworks display that was supposed to have begun yesterday in the Senate Intelligence Committee hearing regarding whether President Trump obstructed justice in an FBI investigation has fizzled out thus far. Director of National Intelligence Dan Coats and NSA Director Mike Rogers both failed Wednesday to satisfy the prosecutorial case that a crime may have been committed, by not offering constructive responses to key questions from senators in the committee.

Following this yesterday, ex-FBI Director James Comey — whose testimony today at 10am ET has been hotly anticipated all week — issued a written statement verifying he did indeed tell the President that he was not under investigation, which would seem to vindicate the pro-Trump factions of Washington DC as well as market participants, who decided to largely ignore whatever hype has been generated in the cable news media this week. Markets had closed down slightly on Monday and Tuesday, but finished in the green as of Wednesday’s close. Pre-market induces are currently hovering around unchanged at this hour.

This is not to give the “all-clear” signal for President Trump just yet: Democrats on Capitol Hill were quick to point out several contradictions between Comey’s written statement and Trump’s take on the series of events. Committee members interested in producing some evidence of wrongdoing today may seek to drive a wedge between these contradictions in building their case against the President. But thus far, especially considering how much breathless emotion has been expelled surrounding this week’s hearing, it appears we’ve not a nothing-burger with a side of suspicion.

U.K. General Elections Underway

Recently elected U.K. Prime Minister Theresa May faces an early challenge to her tenure following the special election that put her in office that came after last summer’s surprise Brexit vote, when the U.K. decided to remove itself from the European Union (EU). With three separate terrorist attacks hitting the country in recent weeks, the British citizenry is understandably rattled; May’s re-election is far from completely assured, although chances are still good she and the Conservatives will prevail over Labor party leader Jeremy Corbyn, known as the Bernie Sanders of the U.K.

Should May and her party lose control of parliament and 10 Downing Street, this could generate an abrupt about-face in the march toward the U.K.’s decoupling in re Brexit. Odds are against this occurring, but keep in mind so were the odds against the Brexit vote itself last year.

ECB President Takes Dovish Tone

At a news conference in Estonia today, European Central Bank (ECB) President Mario Draghi has dropped rhetoric relating to “downside risks” in the European economy, thereby striking a more dovish tone than previously. Draghi saids he expects GDP to rise faster in the union, and mentioned that inflation was subdued. But he did not discuss tapering or an exit strategy from current policy. Slowly but surely, Draghi appears be allowing the EU to continue to strengthen on its own.

Weekly Jobless Claims

Initial jobless claims for the past week pushed to the higher side of the range we’ve seen for most of 2017, between 225K-250K — indicative of real strength in the domestic labor market — by coming in at 245K. The previous week was revised up by 7000 claims to outside that range, at 255K. Continuing claims stayed steady at roughly 1.92 million.

Even above 250K new jobless claims is indicative of good things for U.S. jobs overall. With a recent unemployment rate read of 4.3% and falling, there should be little tension among market participants regarding jobs in this country. Especially relative to tensions elsewhere, including (for now) Capitol Hill.

Mark Vickery
Senior Editor

Questions or comments about this article and/or its author? Click here>>

SPDR-DJ IND AVG (DIA): ETF Research Reports

NASDAQ-100 SHRS (QQQ): ETF Research Reports

SPDR-SP 500 TR (SPY (NYSE:SPY)): ETF Research Reports

Original post

Zacks Investment Research