Dow stocks up modestly Wednesday, while S&P 500, NASDAQ averages trade flat to modestly negative. Next weekend’s possible freakout: Italian constitutional referendum.
WASHINGTON, November 23, 2016 – In all candor, there’s not much to write about this Wednesday, the day before the U.S. Thanksgiving holiday. Trading has been light this week, is light today and will likely be even lighter on Black Friday as many investors will be doing their trading at either the local shopping mall, at dollar stores at strip shopping centers, or online (prior to Cyber Monday) at Amazon.com or the dozens of brickless and mortarless e-tailers eager for all your money.
Along with the period after Christmas, this is one of two trading weeks of the year where any market moves—short of some surprise declaration of war—will range from suspicious to downright misleading, given that a relatively small number of traders can move stocks and markets significantly and sometimes dramatically, given the very thinness of the markets.
Everyone else will be having fun celebrating the holiday weekend and/or getting in vicious arguments reliving Election 2016 over what’s supposed to be a family-friendly celebration of America’s freedoms. Or those freedoms that still remain for America’s large and disreputable “basket of deplorables.”
But, back to the business at hand… Taking encouragement from or getting depressed over trading action Wednesday and Friday is simply a waste of time and Xanax. The real investment world will be back on Monday, and it’s at that time when we’ll see whether the Trump/Santa Claus Rally is likely to persist into December.
Even if this rally does continue, a likely Fed interest rate increase has been pre-judged to be a slam-dunk by the market. Adding to potentially increased sales of Tums and Maalox, an Italian referendum will be held on December 4, as well, one that could possibly add a third strike to the pair that the Brexit and the “Trexit” (the U.S. election of Donald Trump as America’s next president) have already levied against the Marxist and Globalist elites.
A report earlier today via CNBC tells us why the Italians could be a market issue next weekend:
“On Dec. 4, Italian citizens will vote in a referendum on whether to overhaul their national constitution, which probably has to be amended if Prime Minister Matteo Renzi is going to push badly needed economic reforms through the country’s complicated lawmaking process.
“The vote is widely seen as determining Renzi’s political fate, and he may resign if a ‘no’ vote prevails. Opinion polls show most Italians opposing the proposed constitutional changes, which economists say Italy desperately needs if it’s going to streamline its government and spark growth.
“HSBC warned in a note to clients after the U.S. election that a global surge in anti-establishment feeling — exemplified by the U.K. referendum and the U.S. presidential election — could embolden populist views already widespread in Italy.”
If this seems hard to parse, it is. In the U.K. and the U.S., “change” and “populism” meant that the middle class-killing, legacy elitist policies of both countries needed to be reversed, quickly and utterly in order to save both countries from becoming banana republics, characterized by perpetual low-class vs. upper-class battling and violence, not to mention individual and economic freedoms.
But in Italy, the upper-lower class dichotomy has been well established for a considerable period of time, and any constitutional changes at all are seen, probably realistically, by lower and union classes as eroding whatever powers they might still have and ceding them to the globalists. It’s a tangled web over there, and a “No” vote regarding constitutional change could actually be a bad thing for all concerned, since that economy is already badly stressed.
Time will tell. But with regard to U.S. and European markets, any vote viewed as negative toward the international banking business could upend the current positive outlook on that sector at least in the U.S.
But that’s for next time. Right now, the best investment strategy is probably to forget all the nonsense and start pre-prepping the Thanksgiving turkey and trimmings while making sure the commercial-and-commentary killer button on your remote is functional so you can bleep the nonsense from ESPN during this weekend’s professional and college football extravaganzas.
A happy and safe Thanksgiving Holiday to you all. We’ll pop up this week with columns only if something significant happens. Otherwise, we’re taking a few days off as well.Click here for reuse options!
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