WASHINGTON, February 2, 2016 – As America sat on pins and needles early Tuesday morning, the country’s greatest prognosticator made his long-awaited prediction. No, we’re not talking Iowa. We’re talking Punxsutawney Phil. The world’s most famous ground hog emerged from his posh Pennsylvania burrow this morning.
Encouraged by an entourage of top-hatted officials, Phil failed to see his shadow, and quickly set his prediction to verse:
“There is no shadow to be cast.
“An early spring is my forecast.”
Alas, that’s likely to be the only sunny bit of news for Wall Street this morning as stocks seem set to drop sharply at Groundhog Tuesday’s opening bell. As of 8:45 a.m. EST, Dow futures were off a nasty but not yet disastrous -127. The broader-based S&P 500 and the tech-heavy NASDAQ were also looking as if they’d just seen ghosts of bear markets past rather than mere shadows of things that are to come.
Weighing on markets this morning is a load of data, including declining earnings for Exxon Mobil (symbol: XOM): such a surprise. For this and other reasons, oil seems to be resuming its decline Tuesday morning as well, and, since markets now seem to be marching in lock-step to the price of crude, we know what this likely means for this morning’s trading action.
Adding to the uncertainty were the results from last night’s Iowa caucuses, the first potential indicator of what’s likely to transpire in the elections of November 2016. Unlike the generally reliable Phil, pollsters, pundits and blow-dried TV prognosticators of all stripes were mostly flustered in their earlier, confident predictions, as were a lot of the candidates, proving once again that the common wisdom isn’t so wise.
Conservative bad boy Ted Cruz handily whipped the unbeatable Donald Trump who came in second. But surprising many was the strong showing of Marco Rubio who came in third, only a whisker behind The Donald. Maybe we have a donnybrook here after all.
Meanwhile, Her Hillariness barely edged Uncle Bernie the Commie. In fact, however the Iowa Democrats calculate this stuff, it seems that if about half a dozen more Iowa Communists had gotten off their collective duffs and headed to a caucus here and there, Uncle Bernie might very well have triumphed as The Democratic Peoples of Iowa’s nominee. Oh, well. On to once staunchly conservative New Hampshire where results are likely to be quite different for both parties.
Nonetheless, markets were hoping, perhaps, for a few certain certainties this morning, but Iowa’s results didn’t provide them, adding to the potential Tuesday morning chaos the futures are foretelling.
However things turn out, we’d stay away again today, unless some silly bargain shows up on the trading radar. With oil, politics and central bankers in complete control, aided and abetted by the HFTs and their high-speed machines and protean algorithms, we mere mortals must stand back once again and await the elusive return of rationality to U.S. and world markets.
The world’s greedy oligarchs opened Pandora’s box long ago, and for now, we can only stare at the small ration of hope that remains. Stay tuned.