The collision of global markets and social mood

Tuesday, January 17, 2017

Monday -- USD Trumped, Italy Downgrade, More China Vol, Social Mood

S&P E-Mini Futures:
Recovering sharp overnight losses.

News:
Never thought the Big News overnight would be Donald shooting down the US dollar, but should have expected it given his Make It In America rhetoric. Can't have a strong dollar if you want companies to build stuff here and sell it abroad.

Glad he slammed the boarder-tax adjustment, though. Turning out to be a complicated mess, and Trump said he wants something far simpler.

The main point is that the honeymoon may be over, and that even with a Republican House & Senate, it may be a bumpy ride from here on.

Interesting that DBRS quietly cut Italy's credit rating rating after the markets closed on Friday, ahead of the long weekend.

China's second largest equities market, the Shenzhen Composite, fell as much as 6.6% Friday after trading lower for several days. Again, something seems to be brewing.

Maybe it's because people are starting to see the reality that China may soon use Taiwan as a guinea pig to illustrate how serious they are about their One-China policy. With ever-increasing war-drum rhetoric, the fate of Taiwan could soon be seen in an ugly way.

Another huge problem for the Facebook (and Google too):


Sounds like all that "traffic" is as fake as Fake News. Another thing that large media buyers can't be caught dead with in their media plan.

Note: Dug a bit deeper into India's so-called cash ban and found that, thus far, it is a ban on Rupee notes worth $7 and $15. So while not an outright ban, it's still a big pain, and it still displaces the poor and vulnerable in the name of combating the underground economy. Sounds like Modi went about it backwards. There are even signs that he may have put his BJP political party in jeopardy ahead of this year's legislative elections. If so, he could have a tough road to the 2019 general elections.

The spin from Davos. If you're not a globalist you're a protectionist. Zzzzz

Social Mood:
Mixed mood continues.

The bull case (people tend to be more concerned about their appearance in bull markets):


The bear case (people don't want to appear at all in bear markets):


FX:
Another day of strength for CHF and JPY thus another Risk Off signal.

USD down hard on Trump's "too strong" comments, yet it bounced off the previously mentioned 1:1 Fib extension at 100.43, hitting 100.45. Important area currently.

Treasuries:
Yet more topping tails.

Energy:
WTI crude likes weak dollar prospects, up over 1%, even as the latest OPEC agreement teeters.

NG not so much into the weak dollar, cold weather,  or much else.

Metals:
Base copper sitting out the precious rally.

S&P Outlook:
Thinking today's decline may be a buying opportunity if 2254.25 holds, judging by how futures have recovered.

Using ES 2257.50 as the stop, however. ES 2248.50 is the corresponding level to 2254.25 on the cash S&P, and don't really want to risk it that far down. So this morning's recovery area in E-minis it is.

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