Tuesday, June 6th, 2017
Monday’s market closes ticked down slightly, and another slight sell-off looks to await Tuesday’s market open at this hour. Yet the S&P 500 remains above 2400 for the seventh straight day — read more about that here — and the general tone in the stock market this week and last remains solid and steady overall. However, there are news headlines in the present and expected in the near future that may suggest this tone softens, depending on what transpires.
Oil prices are down for a third straight day following a continued rift between Saudi Arabia (plus three other countries in the region) and its Arabian peninsula neighbor Qatar, in which the U.S.’s strongest ally in the Muslim world leads Egypt, the United Arab Emirates (UAB) and Bahrain in severing diplomatic ties with Qatar, an OPEC member. This followed a state-run news report in Qatar that claimed the country’s emir praised Iran’s President Rouhani following his recent electoral victory.
Saudi Arabia and Iran are the two major powers in the region (not including Israel), and they have been aggressive rivals of each other for decades. Both countries are governed according to Islamic law — the Saudis by its royal family and Iran by a group of religious leaders — and, of course, own tons of oil beneath their surfaces. Qatar, for its, part, denied the validity of the report, claiming its news agency had been hacked by outside sources.
Complicating matters for the U.S., Qatar is also home to one of our military bases — one that directly helps fight ISIS. Being caught in the middle of yet another Middle Eastern skirmish would be undesirable for the Trump administration, to say the least.
Speaking of President Trump, his verbal sparring with London Mayor Sadiq Khan continues this morning, with the mayor urging U.K. officials to rescind an invitation to Trump to the country following the president’s harsh criticism of Khan’s leadership following a terrorist attack in the city over the weekend. “(Trump’s) policies go against everything we stand for,” remarked Khan, according to a report from the New York Post. “There are many things about which Donald Trump is wrong.”
This tiff probably holds little sway in how market participants will choose to trade today, but the slow drip-drip-drip of tensions among American allies and Trump may eventually amount to something, and it’s hard to see how that something would be positive for the United States.
And speaking of growing tensions, much of Washington DC is already abuzz about the forthcoming testimony on Thursday from ex-FBI Director James Comey in front of the Senate Intelligence Committee regarding the investigation of Russia’s interference in the U.S. general election last November, as well as the President’s involvement in attempting to shut down the FBI’s investigation into the matter. On Wednesday, National Security Administration (NSA) Director Mike Rogers is scheduled to testify, and a reporter from The Atlantic mentioned earlier this week that Rogers “has a story to tell.” Drip-drip-drip.
Mark Vickery
Senior Editor
Questions or comments about this article and/or its author? Click here>>
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Geopolitics Not Priced into the Market... Yet
Tuesday, June 6th, 2017
Monday’s market closes ticked down slightly, and another slight sell-off looks to await Tuesday’s market open at this hour. Yet the S&P 500 remains above 2400 for the seventh straight day — read more about that here — and the general tone in the stock market this week and last remains solid and steady overall. However, there are news headlines in the present and expected in the near future that may suggest this tone softens, depending on what transpires.
Oil prices are down for a third straight day following a continued rift between Saudi Arabia (plus three other countries in the region) and its Arabian peninsula neighbor Qatar, in which the U.S.’s strongest ally in the Muslim world leads Egypt, the United Arab Emirates (UAB) and Bahrain in severing diplomatic ties with Qatar, an OPEC member. This followed a state-run news report in Qatar that claimed the country’s emir praised Iran’s President Rouhani following his recent electoral victory.
Saudi Arabia and Iran are the two major powers in the region (not including Israel), and they have been aggressive rivals of each other for decades. Both countries are governed according to Islamic law — the Saudis by its royal family and Iran by a group of religious leaders — and, of course, own tons of oil beneath their surfaces. Qatar, for its, part, denied the validity of the report, claiming its news agency had been hacked by outside sources.
Complicating matters for the U.S., Qatar is also home to one of our military bases — one that directly helps fight ISIS. Being caught in the middle of yet another Middle Eastern skirmish would be undesirable for the Trump administration, to say the least.
Speaking of President Trump, his verbal sparring with London Mayor Sadiq Khan continues this morning, with the mayor urging U.K. officials to rescind an invitation to Trump to the country following the president’s harsh criticism of Khan’s leadership following a terrorist attack in the city over the weekend. “(Trump’s) policies go against everything we stand for,” remarked Khan, according to a report from the New York Post. “There are many things about which Donald Trump is wrong.”
This tiff probably holds little sway in how market participants will choose to trade today, but the slow drip-drip-drip of tensions among American allies and Trump may eventually amount to something, and it’s hard to see how that something would be positive for the United States.
And speaking of growing tensions, much of Washington DC is already abuzz about the forthcoming testimony on Thursday from ex-FBI Director James Comey in front of the Senate Intelligence Committee regarding the investigation of Russia’s interference in the U.S. general election last November, as well as the President’s involvement in attempting to shut down the FBI’s investigation into the matter. On Wednesday, National Security Administration (NSA) Director Mike Rogers is scheduled to testify, and a reporter from The Atlantic mentioned earlier this week that Rogers “has a story to tell.” Drip-drip-drip.
Mark Vickery
Senior Editor
Questions or comments about this article and/or its author? Click here>>