WASHINGTON, April 7, 2017 – Friday news is all political as stocks are taking a back seat amidst an eruption of international and national action and intrigue. Thursday, President Trump ordered a more or less surprise cruise missile attack on a Syrian airbase that was said to have supported a Syrian government air attack that dropped sarin gas bombs on civilian targets. That after the Russians had agreed with the Obama Administration to defang the Syrian military by getting rid of most such weapons. (They can still use chlorine gas, apparently.)
How’d that work out, former President Obama?
At any rate, seaborne U.S. cruise missiles took out the airbase in question, right in the midst of Trump’s much anticipated Florida meeting with Chinese boss Xi Jinping, who, according to online references, currently holds the positions of General Secretary of the Communist Party of China, President of the People’s Republic of China, and Chairman of the Central Military Commission. Sounds like “dictator” would suffice, but then again, that’s this writer’s opinion.
The main topic of this U.S.-Chinese high-level get-together is presumably the major trade issues the new administration has with China. But the surprise Syrian bomb attack may also have been meant to send a message to Russia, China and North Korea (and maybe even Iran), signaling that after an 8-year nightmare, the U.S. is back and won’t hesitate to intervene if pissed.
Of course, the Russians can’t take this sitting down. As we write this, Russian military vessels stationed in the Middle East are steaming toward the American ships that lobbed those cruise missiles at Syria, likely ready to play a little game of chicken on the high seas.
Meanwhile, back in Washington, D.C., the swamp that needs drained as some of our friends in West Virginia might put it, the Supreme Court is now back to full, 9-member strength as Neil Gorsuch was confirmed by the Senate Friday, providing (we hope) a more-than-adequate replacement for the late, brilliant Antonin Scalia.
This is heady, and perhaps even scary stuff all happening at once, so you’d expect markets would be going nuts on the downside. In Friday morning trading action, that surmise was indeed correct. However, all three major averages have turned slightly positive as of 1 p.m. ET, so who knows how things will end.
Today’s big winners are physical gold as well as various gold ETFs and at least a few mining companies involved with precious metals. This is good news for gold bugs, as gold has been stuck in a meandering downtrend for months. Whether this move has some staying power remains up in the air, however.
That’s because gold has, at least for now, assumed its customary role as a hedge against international violence, both physical and political. If the current crisis mode in Washington recedes without many repercussions, gold may once again sink. But as for now, it’s up $7.20 per ounce, though its traditional companion, silver, is off two cents.
But everything else appears to be doing its own thing today, leaving the averages more or less okay at the moment. But, given that we tend to get bouts of intense selling near the markets’ 4 p.m. ET close each trading day, we’re not sure just how long the bulls can withstand the grinding relentlessness of the bears who are absolutely determined this time not to get blown away yet again by another massive short squeeze by the bulls.
We love doing this stuff. But frankly, today and most of this week has been very, very tedious, at least stock-wise. So we’ll probably quite early today and get a head start on protecting our tomato plants from what looks like a very cold weekend down here in the Virginia suburbs of The Swamp.
We’ll see you next week, depending on the action. Stay safe.
*Cartoon by Branco. Reproduced with permission and by arrangement with LegalInsurrection.