Breaking up is difficult when the elites continuously thwart the will of the people, and that continues to happen in the UK. Boris Johnson came short of pushing through his newly brokered arrangement with the EU to let Great Britain go its own way.
I have to say, in a way, it was weird the U.S. stock market sold off on the news since many financial types want to see the UK stay ensconced in the European Union. I think this points to fatigue on both sides of the Atlantic, where even those that warned of economic doom want to see the drama come to an end. After Donald Tusk threw his support behind yet another delay, we could see this saga start all over again.
It remains to be seen what Johnson does next, but it looks like he may have no choice other than to go back to the people again for a new vote. Sadly, those that say they’ll honor the voice of the people in a new vote are sure to change their minds again. It boils down to this fact, the arrangement is hugely beneficial to many, including those in financial markets and those looking for cheaper language.
Do not go gentle into that good night.
I know Wall Street just wants it all to be over. No matter how much angst and fearmongering come with major negotiations, around the world it’s the will of the people, and western democracies should pay attention to a planet with lots of Main Street uprising.
- Let United Kingdom Go
- Get to a China Trade Deal
- Sign USMCA into Law
These are not death sentences, on the contrary, they will breathe new life into societies and economies.
More Signs Manufacturers See a Deal
Last week, it was the Philly Fed Manufacturing report that saw a major bifurcation between current conditions and future business anticipation. Yesterday, the Richmond Fed saw a nice October rebound from a negative read in September.
Richmond Fed Manufacturing Report
While current conditions saw impressive gains, there were large surges in business expectations in the next six-months. These numbers are huge, and once again add credence to my theory of a deal or significant movement toward a deal in the next six months.
Richmond Fed Manufacturing Report | Current | Future | ||
October | September | October | September | |
New Orders | 7 | -14 | 33 | 22 |
Shipments | 4 | -14 | 24 | 15 |
# Employees | 13 | 3 | 20 | 16 |
Work Week | 10 | -10 | 15 | 8 |
Capacity Utilization | 7 | -11 | 27 | 21 |
Market Breadth
Although major indices slipped into the close, market breadth wasn’t too bad.
NYSE
- Advancers 1,719
- Decliners 1,220
- Up Volume 1.86 billion
- Down Volume 1.15 billion
- New Highs 175
- New Lows 28
NASDAQ
- Advancers 1,482
- Decliners 1,636
- Up Volume 776.7 million
- Down Volume 834.3 million
- New Highs 109
- New Lows 79
Portfolio Approach
Communication Services | Consumer Discretionary | Consumer Staples |
1 | 3 | 2 |
Energy | Financials | Healthcare |
1 | 2 | 2 |
Industrial | Materials | Real Estate |
3 | 1 | 1 |
Technology | Utilities | Cash |
3 | 0 | 1 |
Today’s Session
The market is showing remarkable pre-open resolve despite weak earnings misses from Boeing (BA), Caterpillar (CAT) and Texas Instruments (TXN). Boeing is maintaining its timeline to bring the 737 MAX back, and the stock is indicating up in the pre-market. Caterpillar not only missed but lowered guidance. Texas Instruments (TXN) reported earnings that also disappointed and the stock is getting hit to the tune of 8%. It is hitting other semiconductors as well.
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