I am only mildly surprised with the market reaction to President Trump’s firing on Tuesday of FBI chief James Comey after the trading closed.
I don’t want to make the Comey sacking seem to be a Constitutional crisis, however markets generally despise unexpected events and can whipsaw on the rumor, nevermind the surprise event.
On Tuesday night stocks futures opened 20 minutes after the firing and were down only marginally at 30 Dow e-mini points. The raw emotion of the event — even for algos — should have had a more dramatic reaction, in my opinion. Hell, the 10-year bond saw strong buying overnight.
My only explanation for this action (or lack thereof) is to amend an old surfing adage: You don’t want to be goofy-footed when a big tax cut is on the horizon.
An update on bitcoin. The digital currency traded above $1,700 after a sell off from $1,750 range overnight. It too had a sell off when the Comey news broke. This morning at 7am EDT its at 1,724.
Speaking of on the horizon, Thursday is a big day for earnings. Department stores come out with their Feb-May quarterly earnings. I don’t expect much good news, but analysts have reduced expectations so much that some may record a beat.
I’ll take a look at them a parse the underlining take away.