A Political Split Decision… The Democrats regained control of the House of Representatives while the Republicans added a few seats to its majority in the Senate.
What it means – At the federal level, we’re back to gridlock. Or a worse case of gridlock. It’s not as if the Republicans passed a bunch of meaningful legislation beyond tax reform. We didn’t get a comprehensive law on healthcare or immigration, two of the three biggest factors we face according to voters. But all of that is in the rearview mirror.
Both sides paid lip service to bipartisanship, and then quickly went to their respective corners before they came out swinging. Expect the House to launch an endless stream of investigations and feed reams of confidential information to the press on “deep background.” Anything that makes Trump look bad, true or simply innuendo, will be fair game.
The president has already unveiled his game plan by firing Attorney General Jeff Sessions less than a day after the elections. He’ll likely clean house of anyone not firmly on the team which is not unusually for any President at the mid-term.
Investors breathed a sigh of relief on Thursday, driving the markets up 2% or more. That’s probably short-lived. We’ll get back to the serious business of estimating future earnings in the days ahead. So far, Corporate America is painting a cloudy picture. Get ready for a rocky 2019!
U.S. Oil Inventory Up 5.8 Million Barrels… Oil inventory now stands just 5.8% below this level last year, a marked improvement from the 20% drop in inventory earlier this year.
What it means – The energy world has been gearing up for a shortage, but several things have changed. The U.S. imposed sanctions on Iran, but then granted waivers to some of the country’s biggest oil clients, such as China and India. This alleviated fears that Iranian oil would all but stop flowing. At the same time, U.S. oil production reached another record, 11.6 million barrels per day, and the outlook for oil consumption dimmed as economies around the world slowed down.
All this drove oil prices from $76 at the beginning of October to $61 this week, a 19% drop.
Given President Trump’s recent rants against Saudi Arabia for keeping oil prices high, it’s likely the administration specifically wanted to ease oil prices by granting the Iranian waivers. Now, with oil back to where it was last spring, there are rumors that OPEC will consider supply cuts at its next meeting.
The Federal Reserve Holds Rates Steady… The central bank released a statement that offered no clues on any change to policy.
What it means – Move along, nothing to see here! That’s probably what Fed Chair Powell really wanted to say.
The Fed’s statement didn’t mention trade-induced inflation or the pressure on auto or home sales. It basically read as an all-clear on a rate hike in December. After that, who knows? Expect the statement and press conference after the December meeting to be full of “data-driven” statements, which will give the Fed room to stand pat on rates as the economy slows.
69-Year-Old Dutchman Sues to Lower His Age… Emile Ratelband is frustrated. Really frustrated. And he knows why. The senior citizen is certain that his age is keeping him from better employment and better dating prospects. If only he could list his age as 49 instead of 69, everything would turn his way. He’d get more jobs and more swipes on Tinder. He sued the state in the city of Arnhem, where a ruling is expected this month.
It’s hard to argue with Mr. Ratelband’s logic. In the age of self-identification, why not allowing people to change their age to what they feel? Mr. Ratelband pointed out he will renounce his pension if allowed to change his age. But what about the people who feel older than their chronological years? Are they allowed to take their pensions early? Hmmm?
Data supplied by Dent Research/Delray Beach Publishing
“When the facts change, I change my mind.
What do you do, sir?” ~ John Maynard Keynes
Our plan is “the plan will change.”
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