Watch the stock markets for sentiment on the China trade deal
|Outlook:
We get nothing of much interest today, but we can watch the stock markets for sentiment on the China trade deal, which flailed yesterday. Tomorrow it's CPI and Friday, retail sales, which will project consumer sentiment better than surveys and indices.
But there is one Event today that might turn into a news item—Trump addresses the Economic Club of New York. The majority of economists favor free trade, open immigration and an independent Fed, all things Trump opposes. Besides, he doesn't actually know any economics, and while economists can easily be pilloried for being two-handed, waffly and spineless, they do value Knowledge. There's only one thing Trump can say that would get applause in this crowd—he is postponing or removing the Dec 15 tariffs on China, or the auto tariff decision due Nov 15. Since Trump sees the stock market as a poll on his personal favorability, he may well deliver some happy news on removing tariffs, either China or autos, or both. If it's the auto tariffs that get the hammer, the euro has a fighting chance to get boosted.
Our reversal signal in the pound has yet to be confirmed. The upmove can easily fizzle. But it seems to be a trigger for improvements in the euro, too. Weirdly, some seemingly unrelated currencies may also get a boost that can morph into a rally or a rallyette, like the NZD. Sentiment is like ripples on a pond...
Politics: The live impeachment investigation starts offering testimony to the public tomorrow. As so many pundits point out, the case is clear: the Constitution names only two specific causes for impeachment—bribery or treason. (The rest of the misconduct falls under "high crimes and misdemeanors.") In the Trump case, we have Trump soliciting a bribe from not one, but two Ukrainian presidents—dig up dirt on the Bidens. It's not necessary to point out that there was a gun to the Ikrainian head—gimme the thing of value or you won't get the military aid Congress passed for you. The testimony transcript released yesterday discloses that both the State and Defense Dept's were in a tizzy about the legality of the president putting a hold on the promised disbursements and each of them separately arrived at the legal opinion that they must make the payments. And so they did, while still under the hold imposed by the president. So Trump is lying when he says "we released the money"—what's that "we," Kemo Sabe? It was released against his order, not because of it. And Trump defenders have to stop saying "nothing happened—the Ukraine got the money." Separately, already reported but picked up again is that when Energy Sec Perry attended the inauguration of the Ukrainian president, he bought along his political backers who asked for a license to drill for oil and gas, and got it at a discounted price. And the US is the one worried about corruption in another country? When the Trump impeachment is over with, Perry it at high peril.
Meanwhile, the Supreme Court will take on Daca today, the "Deferred Action for Childhood Arrivals," aka Dreamers. Daca was an Obama initiative halting deportation of children brought here by their parents, and widely approved by voters. But the executive action of one president can be undone by the executive action of another, and that's what Trump has done. Trump would deport some 1.7 million Dreamers who registered under the Obama promise of a path to citizenship. Now they are sitting ducks for Trump. Oddly, the Appeals Court ruled that Daca is constitutionally correct and while Trump can end it, so far the legal justification is "arbitrary and capricious." This is yet another example of Trumpian incompetence. The Supreme Court is likely to reject the appeal, letting the Appeals Court ruling stand—Trump cannot deport. But it hardly ends the problem. Congress has yet to create a path to citizenship. The WSJ disapproves of "unelected judges pre-empting" presidential executive authority and/or Congressional action. But the WSJ editorial board forgets the case of the Japanese internment camps—approved by the Supreme Court and reversed only decades later. Dems wail and beat their chests that deporting kids who never chose to come here to countries they never saw is "not who we are." Yes, it is.
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