Remember When I Said the Market Doesn’t Care About Washignton DC? Well it Doesn’t.

Equities start the day lower on AMZN Prime Day! Great, maybe they’ll have Water Bottles on sale, we only have about 485 of those in our home. Not only is it “Pity your UPS Driver for the next week” day but it’s also 7-11 so you can wander on down to your local convenience store and get a free slurpee while you read this recap. Cherry or Coke? So many hard choices in life. With so much going on in the world what should we talk about? Yellen? Yep she speaks tomorrow so keep your ears open for hawkish tones. Earnings? Banks on Friday then a whole bunch of them for the next few weeks, pity the junior analyst eating Taco Bell at 11pm while trying to figure out tax rates. Washington DC? Nope, that ain’t happening here, I honestly don’t care because the market doesn’t either. Quiet Trading?  Bloomberg has that covered today with this crazy quote:  “As a salesman or trader, it does get to the stage where you go, ‘Christ, what am I going to do for the rest of the day?’” said Chris Wheeler, a bank analyst at Atlantic Equities. “I don’t think anyone is going to be that keen to be on the desk when it’s so quiet. The danger is people get quite bored.”Why are things so slow? Passive, summer, algos, robo-advisors, take your pick, the explanations are vast and numerous. Quite frankly all we have to talk about is that the market keeps on keeping on. Earnings growth plus an economy that is still chugging along plus consumer confidence plus a robust job market are what’s keeping the market grinding higher. It’s not the Fed or Donald Trump or some magic Plunge Protection Team, it’s an economy that remains the envy of the World and one that generates a ton of global demand. Did you see Transports break out the other day? Does that make you bearish? Have you seen Housing and Airlines? Tech and Financials? Have you seen the chart of an EQUAL weighted S&P500? All of them are near their highs (the equal wtd one is my favorite to show the “it’s only a few stocks” haters). Me bearish? Only in Jan 2016 when I made my worst call ever. ugh, flog me now.

After the open a political clown show broke out. Remember when I said the market doesn’t care about Washignton DC? Well it doesn’t, but it will react to intraday news dumps like this one. Sigh. Just make it stop, please, I can’t take the nonstop scandal circuit. We sold off 50bps from the highs because Donald Trump Jr and his Russia emails spilled onto the dock like that kid in Jaws. Here’s what I want you to remember about the market and political drama. It’s fleeting, fleeting like a pink sky on a warm July night. It cares about this stuff only tangentially but in the end the stock market reflects the cash flows of US corporations times a multiple linked to the economy. As far as I know Trump or Bush or Eisenhower or Madison didn’t pull all those levers like it was a giant video game. So let’s talk stocks shall we? MS, the lead underwriter on SNAP, downgraded the stock to neutral and basically said “we were wrong”. Things that make you go hmmmm? Red Apron was down another 7% as somebody from Northcoast slapped a $2 PT on it. Yikes. Say what you want about “disruptors” but not all of them are wildly successful out of the gates. KORS, ULTA, and UA were all down because they sell things in stores.  Meet the new boss, same as the old boss. Winners were mostly energy related and when’s the last time you heard that sentence? I can’t even recall to be honest, maybe when movies started being shown in color? By lunch we had recovered most of the “someone with Trump in their name did something crazy” selloff to sit at 2,422, down 20bps. Did you get an echo yet? No? Go get one for crying out loud they are amazing.

The rest of the day was a slow grind back to unchanged and a close in limbo. Look, for as much attention as this gets from the news media our market has shown time and again it doesn’t care about Russia or emails or anything else Swamp related. Will it react negatively to random headlines when they hit our Bloombergs?  Sure, but like economic data and Fed statements it’s not the initial move that matters it’s the CLOSE and we closed like it never happened. Let’s see what Yellen has to say tomorrow about balance sheets and Fed policy because it’s all we got until the banks report on Friday.   In the meantime enjoy your summer night and don’t buy any of this junk from Amazon!  

Final Score:  Dow flat.  S&P500 -8bps, Nasdaq +27bps, Rus2k +33bps.

 

News Highlights:

 

 

 

 

 

 

We’ll end tonight with a pretty hairy motorcycle accident. Does this guy grind his face against the pavement for like a full 5 seconds?

 https://youtu.be/uNwQK_HIHRU

 

Have a good night