Bull

Politics (with a side of War and Terror) are heavily interwoven with stock markets these days (says Captain Obvious).  Markets came under pressure with the Trump/Republican Healthcare reform follies and then Tomahawks, MOAB and terror.  Then last week Mnuchin jawboned tax reform and Trump tweeted it.  A fantastic package is on the way!

This morning we have the Le Pen/Macron runoff hype, which I supposed means something (though I’m not sure what).  Whatever it means, it’s bullish.  But it’s only bullish because the market was either going to break consolidation (and the angst of the last several weeks) to the upside or renew its correction.  So this political theater is a little tinder box.

Here is the S&P 500 futures, following what the NDX and to a lesser degree, the SOX did last week.  SPX and Dow are breaking consolidation this morning, following the leaders.

But it has little to do with Le Pen/Macron.  We have been talking about what might happen if peace were to suddenly break out.  Gold, silver and Treasury bonds (i.e. risk ‘off’) would drop (another well timed contrary indicator by Bloomberg on bonds?) and risk ‘on’ would rise.  This political theater is an excuse for the issues of the last month to unwind.  It’s best to filter the hype of the moment in the news down to a little murmur.  What’s happening now is a sentiment thing.