As most know we firmly believe that economic fundamentals and policy matter more to the markets than politics. But this week has been unsettling from a political and national leadership standpoint. Some key elections are still bitterly contested. News has leaked that more Mueller indictments are coming. The Trump administration appears to be beset with infighting and turmoil. We continue to have chilly relationships with historical European allies. And then there are the horrific California fires.
To the extent that this sense of national unease is widely shared, one wonders if it is casting a chill on the U.S. equity markets, notwithstanding solid fundamentals. Nevertheless, we remind ourselves that the historical pattern of the U.S. stock market has been to perform well after midterm elections through year end.
- China Trade Talks Revived: Trade conflicts with China are probably the biggest cloud over equity markets now, so news of revived talks is welcomed. This CNN article has some useful details around the issues. Clashes among Trump's economic advisors are an important subplot in this important national issue. What advisors will ultimately have the President’s ear when it comes to making a deal?