Where’s the beef? Wall Street’s Nothingburger Wednesday
WASHINGTON, August 23, 2017 – We should have known that after Tuesday’s vivid display of irrational exuberance on Wall Street, we’d get a trading hangover on Wednesday. And that’s exactly what we got: A broad-based but fairly shallow decline, a literal nothingburger of a day, with most of yesterday’s winners getting at least moderately knicked before today’s closing bell.
The punditocracy blamed today’s setback on President Trump’s straightforward comments in Phoenix last night, namely that if we didn’t get some serious negotiations soon, he’d pull us out of NAFTA. And just for good measure, he threatened to shut the government down when it (technically) runs out of money this fall unless Congress stopped wasting time and rammed the funding for “The Wall” through both houses.
Immediately, the usual suspects blamed every bit of today’s decline on those Presidential remarks, particularly on CNBC’s online homepage, where virtually every single headline this morning slammed Trump in every imaginable way, shape, or form. As in this one:
Be afraid! Be very afraid! Small wonder the President keeps harping on his “fake news” meme. That’s precisely what this distilled crap is: fake news.
Predictably, Reuters and others got in on the Trump Blame-a-Thon as well, proclaiming before today’s opening bell:
“Wall Street looks set to open lower after U.S. President Donald Trump promised to shut down the government if necessary to build a wall along the border with Mexico. Plus, Trump also said he might terminate the NAFTA treaty with Mexico and Canada to jumpstart talks.”
What really happened today was a predictable, opportunistic sell-off, enabling day traders, fast traders and supercomputers alike to flip yesterday’s nice gains first thing this morning for short-term profits. Helping them along was an indication of some weakness in the housing sector due to reduced sales, due allegedly in turn to increased materials pricing.
Retailers and advertising companies also got whacked, the former mostly in sympathy with DIY chain Lowes Corp. (symbol: LOW), which reported lousy earnings this morning. Lowe’s lost $3.25 per share, or 4.3 percent, to close at $72.55.
Even Home Depot (HD), Lowe’s biggest direct competitor, got kicked in the virtual corporate teeth today after Tuesday’s nice run in the company’s share price.
Listed advertising firms were also weak in Wednesday trading action after one major London-based advert firm, WPP, cut its 2017 revenue forecast. It said clients are feeling pressure to control their spending, and WPP’s shares sank 10.9 percent in London. U.S. ad firms again dropped in sympathy.
Our portfolios were weak today but not disastrously so. Perhaps when we ask “Where’s the beef?” on the morrow, we’ll have some better answers, improving on Wednesday’s nothingburger of a day.