Where the Market Left Us After It's Big Jump Last Week
It's May 1st. We begin a new week and a new month. It's also the end of the new administration's "First Hundred Days." Anything appealing lurking out there to engage our hearts and minds? I hope it's more than we've come across lately. With that in mind, let's take a quick look at markets and politics to see if we can find anything that might make May a month to remember.
Last week's post regarding the stock market's jump (and other markets' slumps) post French election outlined what we might keep our eyes on in subsequent days. The thing is, nothing's really happened since then. All those major asset classes to which we referred re-jiggered themselves a bit: stocks quieted down, bonds and gold recovered a bit. But at the end of the week, nothing much was proven either way. And so we continue to watch.
One interesting observation, though, has to do with that election. You may have noticed that stocks jumped after Trump's win; and they jumped after the French election too. Is there any connection? It could be that there's some sort of "anti-establishment" connection. Macron (who won) and Le Pen (close second) both tried to position themselves against the grain. Trump did the same.
But a closer look makes you wonder. Macron (touted to be center left vs. Le Pen's center-right) isn't some wild-eyed reformer or Trump-like maverick. He's a banker by trade: rather main-stream. He might be clever enough in positioning himself against the political establishment, but it doesn't look like he's against the established order itself. He's made his bones working for that order.
Whatever you think of Trump, one thing interesting about his candidacy - once it became clear it was serious enough to win - was this "maverick" thing. Being from New York, I've been inundated with the man's public persona for years. He was never really a conservative icon, but the liberal establishment that dominates New York politics never really warmed up to him. He was, in a sense, a bit of an outsider (that is if you can consider someone with ties to all the rich and powerful, who has a regular table at the 21 Club, and who seated Bill and Hillary Clinton in the first row of those who attended his wedding to his present wife, as an outsider).
Macron, on the other hand, would really have to show us more to believe he'd do anything to really upset the apple cart. Can the French really believe he's in any sense an outsider? Le Pen, on the other hand, despite trying to "center" herself and her party during her run for election, has a history of being a bit maverick. But she's not favored to win the coming final election.
Why do we bring all this up? Because we doubt that the stock market was really responding either positively or negatively to that French election. It's simply in a bull market, and was looking for an excuse to press upward, in the midst of its almost-correction. I don't think the price action taught us anything else.
As for the political trends, it remains to be seen whether all this "anti-establishment" sentiment amounts to anything. Trump's first hundred days are done, and there's little to show for it. The French coming election between Macron and Le Pen (the first one was a kind of elimination round) may provide some hint at the future of the EU. But so far, we're starting to wonder what happened to all the discontented "masses" who voted for Trump and supposedly voted Macron-Le Pen. Even Theresa "Brexit" May seems to be tempering the exit of the UK from the EU somewhat. You wonder if she'd find some excuse to slow down or even reverse the anti-EU election result that propelled her into office.
All this meandering has some of us yearning for the screeching of rubber hitting the road at some point. For the U.S.: meaningful control of our borders; significant tax cuts that will not only help corporations and the economy, but provide relief for the middle class, the traditional backbone of any society; an end to low interest rates that leave retired Americans scrounging for a return on their savings; an economy that provides the reasonable possibility of obtaining a job that pays a living wage; an end to federal loan programs that effectively subsidize ridiculously high college tuition and promote the system that everyone needs a college education to earn anything more than minimum wage; an end to federal subsidies of abortion and contraceptive products and services (why would a government want to actively pursue a public policy of reducing its population?); an end to federal subsidies of a health care system (and that includes insurance companies) that drives prices of every medical service and practice far above those in other countries, forcing all of us to pay steep health care premiums so we can "afford" health care.
Okay, I'm getting carried away here. But, really, has anything of substance occurred that could assure us that all the discontent won't just be "massaged" by politicians who care only about being re-elected? Then again, you never know. Perhaps May will prove to be a month that brings not only flowers, but a blooming of that "American spirit" that our President keeps assuring us can't wait to be awakened.
Last week's post regarding the stock market's jump (and other markets' slumps) post French election outlined what we might keep our eyes on in subsequent days. The thing is, nothing's really happened since then. All those major asset classes to which we referred re-jiggered themselves a bit: stocks quieted down, bonds and gold recovered a bit. But at the end of the week, nothing much was proven either way. And so we continue to watch.
One interesting observation, though, has to do with that election. You may have noticed that stocks jumped after Trump's win; and they jumped after the French election too. Is there any connection? It could be that there's some sort of "anti-establishment" connection. Macron (who won) and Le Pen (close second) both tried to position themselves against the grain. Trump did the same.
But a closer look makes you wonder. Macron (touted to be center left vs. Le Pen's center-right) isn't some wild-eyed reformer or Trump-like maverick. He's a banker by trade: rather main-stream. He might be clever enough in positioning himself against the political establishment, but it doesn't look like he's against the established order itself. He's made his bones working for that order.
Whatever you think of Trump, one thing interesting about his candidacy - once it became clear it was serious enough to win - was this "maverick" thing. Being from New York, I've been inundated with the man's public persona for years. He was never really a conservative icon, but the liberal establishment that dominates New York politics never really warmed up to him. He was, in a sense, a bit of an outsider (that is if you can consider someone with ties to all the rich and powerful, who has a regular table at the 21 Club, and who seated Bill and Hillary Clinton in the first row of those who attended his wedding to his present wife, as an outsider).
Macron, on the other hand, would really have to show us more to believe he'd do anything to really upset the apple cart. Can the French really believe he's in any sense an outsider? Le Pen, on the other hand, despite trying to "center" herself and her party during her run for election, has a history of being a bit maverick. But she's not favored to win the coming final election.
Why do we bring all this up? Because we doubt that the stock market was really responding either positively or negatively to that French election. It's simply in a bull market, and was looking for an excuse to press upward, in the midst of its almost-correction. I don't think the price action taught us anything else.
As for the political trends, it remains to be seen whether all this "anti-establishment" sentiment amounts to anything. Trump's first hundred days are done, and there's little to show for it. The French coming election between Macron and Le Pen (the first one was a kind of elimination round) may provide some hint at the future of the EU. But so far, we're starting to wonder what happened to all the discontented "masses" who voted for Trump and supposedly voted Macron-Le Pen. Even Theresa "Brexit" May seems to be tempering the exit of the UK from the EU somewhat. You wonder if she'd find some excuse to slow down or even reverse the anti-EU election result that propelled her into office.
All this meandering has some of us yearning for the screeching of rubber hitting the road at some point. For the U.S.: meaningful control of our borders; significant tax cuts that will not only help corporations and the economy, but provide relief for the middle class, the traditional backbone of any society; an end to low interest rates that leave retired Americans scrounging for a return on their savings; an economy that provides the reasonable possibility of obtaining a job that pays a living wage; an end to federal loan programs that effectively subsidize ridiculously high college tuition and promote the system that everyone needs a college education to earn anything more than minimum wage; an end to federal subsidies of abortion and contraceptive products and services (why would a government want to actively pursue a public policy of reducing its population?); an end to federal subsidies of a health care system (and that includes insurance companies) that drives prices of every medical service and practice far above those in other countries, forcing all of us to pay steep health care premiums so we can "afford" health care.
Okay, I'm getting carried away here. But, really, has anything of substance occurred that could assure us that all the discontent won't just be "massaged" by politicians who care only about being re-elected? Then again, you never know. Perhaps May will prove to be a month that brings not only flowers, but a blooming of that "American spirit" that our President keeps assuring us can't wait to be awakened.
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