Summary: As an unexpected pro-labor vote in the U.K. weakened the pound and strengthened the dollar, the market reacted more to political news, abroad and at home. The uncertain results of Comey’s testimony dampened concerns about the Trump Presidency. Prior to Comey’s testimony someone sold a huge amount of gold, causing gold to drop, although it finally closed only down about $7, with another selloff this morning. Gold stocks, though continue to trade much better. NASDAQ got clobbered, Meanwhile, economic data continues to bring bad news: Consumer Credit numbers was a big miss with $8.2 billion instead the expected $17 billion.
- Yesterday we had the trifecta of potentially market moving events
- In hindsight, what looks like the most significant was the elections in the U.K.
- With the surprise strength coming from the Labor Party to deny the Conservative Party a majority
- It looks like May will remain Prime Minister even though the Conservatives do not have a majority in Parliament, because they can form a coalition, a minority government with another party
- But May’s position is weakened and she did not get the results she gambled on when she called the election
- The reason the Labor party did so well was because of the young vote who overwhelmingly voted for Labor
- Which shouldn’t be much of a surprise, after they’re the ones who are promising the most free stuff, and it’s younger people who are the most susceptible to that message
- Particularly people with little work or life experience
- That’s one of the reasons the voting age should be higher
- In the U.S. the voting age is 18 and it was changed by Constitutional amendment
- It used to be 21, and it was the Vietnam war that caused the voting age to be lowered from 21 to 18
- The cry was, if you’re old enough to fight, you’re old enough to vote
- That’s another example of how we lose every war
- I would prefer the voting age stay at 21, in fact I think it should be 25
- “Old enough to fight old enough to vote” makes as much sense as, “If you’re too old to fight, you’re too old to vote
- The one has nothing to do with the other
- The weakening of the Conservative government in the U.K. brought the pound down
- The pound was down about 1.6% today
- And the weakness in the pound spilled over into strength for the dollar against other currencies
- All the dollar’s gains happened last night
- During the session today, the dollar gave back some of its gains
- It re-took the 97 handle, after making a new 6-month low earlier in the week, we got down about 96.50
- We closed out the week at 97.28
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