WASHINGTON – We’ve often noted that investors’ favorite old song might very well be “What a Difference a Day Makes.” It’s likely the last 3 generations haven’t ever encountered this song. But its refrain accurately describes the often violent and often unpredictable stock market action since the beginning of September. It’s been a non-stop Wall Street thrill ride all the way. The latest news: President Trump and Congress might actually agree on some kind of mini-stimulus deal.
Let’s rewind the virtual tape to our previous article.
On Tuesday, we started out writing a piece on Mr Market’s positive chirpiness. But just as we were about to hit the “Publish” button and post the piece, we got word that President Trump was at wit’s end regarding the Democrat-led House’s continued wrangling over the proposed Stimulus II legislation. Oops! It was addenda time, as we punched in the last-minute bad news. Talk about late-breaking stuff…
Pelosi, Democrats want an issue not a solution. Mr Market pays the price
Trump, returning to action after a brief but nasty bout with Covid-19, was exasperated by Nancy Pelosi’s never-ending insistence on paying billions of dollars of tribute to several horribly mismanaged and needlessly locked-down blue states. He correctly perceived that their fiscal misfortune was their own fault, and saw no reason why more prudent (and mostly red) states should have to bail out the idiot governors and idiot voters who’d brought on their own misfortunes themselves.
The moment that unexpected Trumpian tweet hit the wires, roughly 30 minutes before Tuesday’s closing bell, Mr Market instantly did a 180. Major market averages promptly reversed from green ink to red, tanking 500 Dow points before recovering somewhat at the close, but still closing deep in the red zone. Another Wall Street thrill ride. The kind we don’t much like.
As we noted yesterday, it’s nuts trying to make sense out of a market that’s so often driven one way or the other due purely to intensely felt but often irrational emotion. Wall Streeters by now ought to know that the President’s negotiating style is typical of most New York businessmen. It’s intense, it’s ugly, it’s confrontational, and it focuses opponents mightily. The intent is to insist that the other party get serious about doing business or get out.
Washington’s 4-year treasonous, seditious coup d’état continues against America
It all makes sense. But not to Congressional Washington, and particularly not to Democrats who’ve worked 24/7 since Election 2016 to thwart the will of America’s electoral majority. Their favorite issues, like illegal immigration, are those they claim they want to solve, but then don’t solve when they’re in power. They just drag these issues on, because they want campaign issues more than they do solutions.
Everyone, including the sometimes obtuse Federal Reserve, knows that America is recovering from this spring’s Pandemic Panic. Or, at least that part of America that’s not colored blue. These state governors and governments continue to punish their constituents with endless and unnecessary lockdowns so they can blame high unemployment on the President to make him look bad in his 2020 re-election bid.
In other words, blue, mostly coastal states, are clobbering their own people to screw the President. That’s what today’s Democrats have come to. People still vote for them. We have no idea why.
Pelosi, Dems, expect Trump, GOP to cave, as usual, on stimulus extortion. Mini-stimulus, anyone?
Pelosi’s plan for Stimulus 2 is to either pass her own, overstuffed version. Or blame the President for intransigence. She’s clearly counting on the GOP’s tradition of caving at the last minute on any outrageous Democrat demands rather than get (predictably) savaged by the all-Democrat media for trying to impose some kind of fiscal responsibility on a bad situation. But the President is trying to call her bluff. One result was Tuesday’s market clobbering.
Today, stocks perked up again when the President raised the possibility that he and Congress – both houses – might agree on a very limited mini-stimulus package that bailed out the nearly-destroyed airline industry. Optimistically, those involved also think that another round of $1200 checks to American workers might be able to pass as well. But we have our doubts about the latter, and about any kind of mini-stimulus passing as well.
At any rate, the mere possibility of something got the bulls in a tizzy today. As a result, the Dow soared, closing up 530.70 points, a nearly 2% gain on the day. The tech-heavy NASDAQ and the broader-based S&P 500 weren’t far behind. “What a Difference a Day Makes.” Wall Street thrill ride: Part 2, the Sequel.
The Veep debates are about to begin
Mini-stimulus dreams aside, out in Salt Lake City, Trump’s VP, Mike Pence and the Democrats’ President-in-Waiting, Kamala Harris, are getting ready to square off out West. Debate time was set for 9 p.m. ET the last time we looked. The contest will likely be more subdued than last week’s donnybrook in Cleveland, so it may not move markets very much. But who knows, really?
The media will spin it as a big Harris victory no matter what actually goes down. We’ll all need to be prepared for that. But viewers will likely know the truth by the time the shooting shouting match concludes later tonight.
We’re not going to call this one at all, nor are we going to predict tomorrow’s Wall Street thrill ride. Anyone who predicts anything these days in America tends to look like a fool by day’s end. So we’re going to avoid that fate by taking a pass on reading either Wall Street’s or Washington’s crystal ball. Futures are showing some optimism Wednesday evening. But we’ll see what things look like on the morrow.
*– Headline image: In this relatively vintage 2001 photo, we see the crazy corkscrew turn in the “Raptor,” one of many famous roller coasters at Ohio’s Cedar Point amusement part on the shores of Lake Erie. Paying customers love this kind of treacherous, looping ride. But not so much traders and investors who are enduring another corkscrew in recent trading action. (Image via Wikipedia entry on Cedar Point, CC 3.0 license)*
