WASHINGTON, October 28, 2016 – Stocks were nicely up Friday, attempting to reverse this week’s slow, across-the-boards swan dive in the averages. But around 1:30 p.m. EDT, markets suddenly reversed field as markets were hit by news of a potential new FBI probe of Hillary Clinton’s email debacle.
After spending the morning peppering its online site’s headlines with yet another barrage of negative stories on Donald Trump, CNBC was suddenly forced to post this latest news which has already sent stocks tumbling as a confidently pro-Hillary Wall Street suddenly lost its nerve and quickened its already obvious dumping of stocks.
According to CNBC,
“In a letter Friday, FBI Director James Comey said the agency is looking into new emails, but did not officially say it was re-opening its prior investigation or accusing Clinton of any wrongdoing.
“‘In connection with an unrelated case, the FBI has learned of the existence of emails that appear to be pertinent to the investigation. I am writing to inform you that the investigative team briefed me on this yesterday, and I agreed that the FBI should take appropriate investigative steps designed to allow investigators to review these emails to determine whether they contain classified information, as well as to assess their importance to our investigation,’ Comey wrote.
“‘Although the FBI cannot yet assess whether or not this material may be significant, and I cannot predict how long it will take us to complete this additional work, I believe it is important to update your Committees about our efforts in light of my previous testimony,’ he concluded.”
Note that last phrase: “…update your Committees about our efforts in light of my previous testimony.” In plain English, this is Washingtonspeak for, “looks like the last time I spoke to you guys, I was lying through my teeth, so this time I’d like to correct the record, such as it is, with this new information. Plus, if Trump wins, I don’t want him to sic a special prosecutor on me.”
All this was too much for Friday traders who quickly took the Dow Jones Industrials down from roughly a +70 point gain to a -70 loss as the other major averages followed suit. See what happened to all the averages when news of the new FBI probe–related, interestingly enough, to Huma Abedin and Weiner-gate–hit the tape during the late lunch hour. Chart via ZeroHedge.
Stocks are attempting to recover. As of 2:19 p.m. EDT, the Dow is off 17 points and trying to make a comeback.
Today’s market clobbering, whether it persists or if stocks actually recover most of their gains by the 4 p.m. closing bell, amply demonstrates both the thinness and the nervousness of markets as America heads for Election Day 2016, not much more than a week away.
In his own crude but effective way, Donald Trump has accurately labeled his opponent as “Crooked Hillary.” She and former-president and hubby Bill have dodged the court system for years, gaming the system all the way and using God-knows-what to terrify and/or destroy anyone standing in their way by deploying those age-old political tools known as money and influence to purchase successive “Get out of Prosecutions scot-free” cards.
Most of us on the outside would have gotten something approaching consecutive life-sentences for far less serious offenses. And no, the FBI wouldn’t have let us off either.
That said, Wall Street just loves money, influence, no national borders, cheap and cheaper labor and even cheaper money. Knowing fellow-travelers when they see them, they’ve lavished the Clintons with so much money over the years that neither Bill, Hillary nor Chelsea any longer bother to count their boundless hoard of Benjamins.
Bigwigs ranging from Goldman-Sachs—which has forbidden its employees to donate to Trump—to the genial “uncle” Warren Buffett, who regularly calls for tax increases on the wealthy that he’ll never have to pay, have contributed heavily to this year’s Hillary Clinton campaign. Their money also helps fund the vicious, underhanded, inside ops and negative media barrages that destroyed Bernie Sanders’ candidacy and still keep the Trump campaign on the defensive much of the time.
In other words, the mega-rich have a big stake in getting Hillary Clinton into 1600 Pennsylvania Avenue so they can continue their lucrative games at the expense of most of the rest of us. That’s one reason why those still remaining in the stock market cause YUGE rallies when bogus polls predict a Hillary landslide victory, but also cause Wile E. Coyote-style cliff drops in the averages when it looks like the Donald could pull this one off. Hence, this afternoon’s asinine antics on Wall Street.
Most portfolios are getting hosed in this environment, and so is the Maven’s. It’s tough to get anything done in such a shabby, gamed environment that remains utterly unresponsive to trading tools that have generally worked for the better part of a century.
Everything is a mess. The Maven dumped 500 more shares of Teekay Tankers (symbol: TNK), which is sinking again into near-oblivion. It’s very likely that minimum 3 cents per share the company promised.
Again, we expect TNK to recover at some point in 2017 or 2018 and start paying out stellar dividends once again. At the same time, this position has become far too dangerous to hold in a market environment where a mere whisper of something Wall Street doesn’t like is enough to cause at least a mini-crash.
So we’re down to a minimal number of shares at this point and might dump the rest before the company announces earnings—as usual, TBA. At least TNK’s current CEO is taking a hike and departing the company in January 2017. Anyone else at this point would have done a better job.
On other disappointing fronts… as expected, we were closed out of the 200 shares we requested in today’s Blackline (BL) IPO. As is often the case, most of the shares went to the rich guys who don’t need a quick profit but help themselves anyway.
Shares of the innovative cloud-computing/accounting unicorn stock were priced above the earlier proposed range, coming in at $17 a share for the lucky Warren Buffett clones that got them. The stock immediately popped to 23 on a typical late IPO opening trade, going as high as $25.75 per share before settling down to its current price of $23.15, still up a cool 36.18 percent if you have those shares and want to flip them. So it goes.
Meanwhile, our nearly read-to-sell shares of earlier unicorn IPO Nutanix (NTNX), having popped 200 percent at one point, are nearing their sell-by date, having eroded from a high of $40+ to a current price of $25.58 and sinking. That’s still a 61 percent profit at this point, but it’s a virtual lock to be even lower when we can sell it next week as per our brokerage’s rules. Looks like one of those rich flippers gets to keep the roughly 150 percent profit the Maven has to leave on the table.
On the other hand, any profit in the run-up to the November 8 elections is to be cherished, so we’ll take this one, however much of it is left. But the investment climate and rules these days remain irritating nonetheless. The whole shebang is yet another one of many reasons large and small why Donald Trump may yet improbably be elected President of the United States. As Glenn Reynolds has written many times, “If something can’t go on, it won’t.”
See you next week.
*Cartoon by Branco. “It came from D.C.” Reproduced above with permission and by arrangement with LegalInsurrection.Click here for reuse options!
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