MAD Macro - A Country at War with Itself
Mean Girls Fighting. A Country at War with Itself.
Meanwhile, Our Enemies Are Working Together
Mean girls were fighting in Congress last week. It got ugly quickly. I get it, Marjorie Taylor Greene is very annoying. Marjorie started it when she said Jasmine Crockett’s “fake eyelashes” were getting in the way of her reading a statement for the Congressional record. AOC (Alexandria Ocasio-Cortez) jumped in to defend Jasmine. Jasmine did not need defending. She called Marjorie a “bleach blonde, with a bad-built butch body”. Jasmine won the mean girls fight. It was over quickly. The Progressive Wing of the Democratic Party have a visceral hate for the Orange Mad King I and most Republicans. I don’t think even the far right or MAGA Republicans hate the Progressive Wing of the Democratic Party. They just can’t understand them. The MAGAs are on Mars with Elon and the Progressive Democrats are on Venus. Jasmine definitely won this round of mean girl fighting. The country is at war with itself.
You know who is not at war with themselves? Our enemies. Iran’s President Ebrahim Raisi died over the weekend in a helicopter crash, which was first reported as a hard landing. I guess that’s what a hard landing is called in Iran. Anyway, it won’t matter. In Iran, the President is not important. The Orange Mad King I would not like being President of Iran, although he might like being the Supreme Leader. Supreme Leader Ali Khamenei is in charge until he dies. He is 85, so you never know. Despite Jake Sullivan’s best efforts to ignore or appease the problem, our enemies are working closely together against the Western democracies.
Every now and then I am shocked by something I read in the NYT. Last week it was the romance of Michael Cohen and Rosie O’Donnell. This past weekend it was Opinion columnist, Ross Douthat. He wrote an article titled, “Why the Manhattan Trial Is Probably Helping Trump”, linked here. I was very confused, I thought maybe I was reading the NY Post. Ross compared the Orange Mad King I’s Stormy trial to Hillary and Bill Clinton’s similar problems with Paula Jones and the Blue Dress. Ross even mentioned that Hillary had a campaign team who dealt with the “bimbo eruptions”. The article is definitely worth reading. It might be the end of Michael Cohen and Rosie O’Donnell’s romance. The love story might make a good movie, a little like Michael Douglas and Kathleen Turner in Romancing the Stone. This one could be titled Romancing the Stormy Trial, a modern version with a little gender mystery included.
Mike Wilson of Morgan Stanley has thrown in the towel on his bearish market call. He has raised his market target. I included a chart below. Nothing against Mike Wilson, but this is a Costanza trade in the making. I wish I could talk to George Costanza or at least see if he is dancing again. I think we might have a significant market correction this summer, but who knows. It’s hard to ignore the market momentum and there is still plenty of liquidity. The Fed is reducing QT and the Treasury is running down cash balances to help the Tin Man. Plus the Tin Man is trying to get Fanny and Freddie to offer home equity loans to subprime borrowers. Why not? More free money to keep the Democrats in office. Maybe that’s why gold keeps making new highs. Copper and gold are making new highs today. Risk assets are also due a little higher. The big market moving news this week will be Nvidia’s earnings, which come out after the close Wednesday.
I updated the U.S Dollar Index, Japanese yen, U.S. 10yr yield, U.S. 10yr-2yr yield spread, WTI crude oil, NY copper, London 3 month copper, spot gold, GDX (VanEck Gold Miners ETF), bitcoin, S&P futures and NASDAQ 100 futures charts below.
The dollar, Japanese yen and interest rates are all close to unchanged today.
Crude oil is a little lower, apparently not bothered by the Iranian news. Gold and copper are making new highs. London 3 month copper has not made new intra-day highs yet but it is getting close. GDX (VanEck Gold Miners ETF) is breaking out to the upside of a wedge formation. Bitcoin is a little higher this morning.
S&P and NASDAQ 100 futures are a little higher.
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S&P 500 futures are a type of derivative contract that provides a buyer with an investment priced based on the expectation of the S&P 500 Index’s future value. Nasdaq 100 futures are commodities futures products traded within the equity futures sector. West Texas Intermediate (WTI) oil is a benchmark used by oil markets, representing oil produced in the U.S. Brent Crude Oil is a blend of crude oil recovered from the North Sea in the early 1960s, whose price is used as a benchmark for the commodity's prices. The U.S. dollar index (USDX) is a measure of the value of the U.S. dollar relative to the value of a basket of currencies of the majority of the U.S.'s most significant trading partners. UBS Bloomberg Constant Maturity Commodity Index is a total return rules-based composite benchmark index diversified across commodity components from within specific sectors.
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