WASHINGTON, July 17, 2015 – For once, the Maven has little to say today. After a pretty decent rally week, Friday’s stock trading action is sloppy and listless. One gets the sense that both investors and traders are ready to take an early weekend today after last weekend’s battering over Grexit fears and this week’s sudden if mild euphoria over better U.S. corporate earnings numbers.
Oil continues weak and listless as well, pressured by the President’s lousy, anti-American faux-treaty with Iran which, among other things, unleashes Iranian oil back onto an already glutted market. It’s surprising that oil prices haven’t plummeted much further this week. But more weakness may be on the way next week as the story sinks in.
That said, it’s indeed curious that prices at the pump have been jacked up considerably over the past several weeks even as oil itself has been getting cheaper. Perhaps it’s the usual July holiday price-at-the-pump gouge, traditional each year as oil companies and vendors squeeze as many dollars as they can out of motoring vacationers.
That said, those prices have been hanging high and are currently way out of line with the currently declining price of crude. We’ve seen a break in gasoline prices just over the last two days or so, but there’s a lot more room for prices to slide. We’d like to see that. Right now. That might happen if West Texas Intermediate (WTI) drops below $50 bbl., which it most certainly indicates it would like to do.
In addition to being puzzled by the oil nonsense, remaining traders are also trying to parse Janet Yellen’s defensive and at times totally irrational Humphrey-Hawkins pronouncements mad to a hostile, bristling U.S. House and Senate this week.
Not only is the current Fed Chief stonewalling Congress’ legitimate requests for further information on controversial Fed-Congress information leaks. Worse, Yellen seems to prefer talking on the side to out-of-power Congressional Democrats, bypassing the current Republican leadership.
Worse still, in a year when inflation is moribund, when wages have remained stagnant, and when undocumented, real unemployment numbers have remained high despite of all the triumphant media gasbagging about a “recovery,” Yellen and the Fed seem hell bent on raising those interest rates sometime this fall.
The reason for this bias seems to be the same one our kids tend to give us when they can’t explain why they want to do something: “Just because.” That’s okay for a kid who hasn’t learned yet how to develop a cogent argument. But in a city where policymakers make the really big bucks, it’s inexcusable.
Bottom line: We’re bored like everyone else. We don’t want to hint at trading tips going into another weekend when your investments can’t escape the 24/7 news cycle. So let’s just call it a day right now and plan to come back here on Monday to offer another batch of creative explanations for our continuously inexplicable stock and bond markets.
Have a good weekend.