WASHINGTON, May 31, 2017 – It’s the latest trading day of an increasingly skittish May that finds stocks in many sectors scurrying for someplace to hide.
Crude oil took a 3 percent hit today, with WTI dropping well below its $50 bbl. “safe space;” commodities including fuels getting all fluttery with persistent rumors that President Trump may dump U.S. participation in the warmist-supported Paris Accord; materials following suit out of fear that an oil and gas drilling time-out might damage prices in that sector; and banks and insurance companies off out of increasing fear that Republicans are too incompetent to engineer either Obamacare repeal and replace and/or serious tax reform.
Making matters even worse are fears that the Fed may, in fact, have to hold out on the central bank’s long-anticipated June rate hike, given at least some evidence of an economic pause and possibly diminishing new home sales. Financials, as we’ve indicated above, have already been pulling back due to this changing perception, and that isn’t helping markets at all today.
Maybe it’s actually time for Republican Never-Trumpers to STFU and start passing some legislation before they exhaust their 2017 pre-next-election window. But we suspect this will happen around the time that the Democrats give up on their Marxist-styled “Resistance” to the duly elected President Trump. As in “Never.”
The Dow was off close to 100 points earlier in the day after a brief positive opening. But currently, all three major averages are off 0.10-0.15 percent. This doesn’t seem like much, but the sectors we just mentioned above have suffered damage that’s more severe than the averages themselves.
Likewise, the markets’ latest darlings, the tech stocks, have been sucker-punched today, and are largely the cause of Wednesday’s deceptively tame decline.
Adding insult to injury on the political front, Green Saint Elon Musk, who makes a fortune via endless taxpayer subsidies on his money-bleeding, taxpayer gouging Save the Planet product line, has threatened to leave Trump advisory councils if the president withdraws from the over-praised and absolutely useless (and costly) Paris
global warming climate change Accords.
The whole Paris Accord brouhaha has likely disquieted sectors focused on profiting on money-losing alternative energy technologies that can only replace today’s abundance of clean fossil fuels with massive and continuous taxpayer subsidies, not to mention vastly higher gasoline, natural gas and fuel and utility bills.
But in the end, allowing the products of America’s current fracking boom to overwhelm this nonsense may, in fact, give quite a lift to traditional products and the jobs they produce. This may very well help America actually get back to work, something that wealthy technocrats have no interest in whatsoever.
All this and probably more swirling fiscal and political stuff is combining to hurting most stock sectors today. We’ve already sold a bit of our holdings in May. But negative churning on a day like today offers ample evidence that maybe we should be selling a good bit more as May morphs into June.