Markets were relatively quiet yesterday.  Little or no attention was focused on the weekend events in Hong Kong, Iran, Iraq, China (“reeducation camp” unrest), North Korea, and Israel.  In years past all individually would have generated considerable market reaction.

Most will agree there are no geopolitical premiums; an environment that most seasoned market participants believe as extremely unique, equivalent to negative interest rates.

Attention is mono variable…trade.  Perhaps the axiomatic statement “things remain the same until they don’t” is perhaps appropriate.

I believe text books will be written about today’s environment, an environment largely fostered by the evolution of current trading strategies that reward momentum and capitalization.

Hopefully the eventual unwinding of today will not cause a systemic event.

What will happen today?

Last night the foreign markets were up.   London was up 1.18%, Paris up 0.29% and Frankfurt up 0.96%.  China was up 1.33%, Japan down 0.53% and Hang Sang up 1.55%.

The Dow should open nominally higher on trade optimism.  There were several high profile earnings disappointments in the retail sector.  The 10-year is unchanged at 1.82%.


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