Equities sold off on Friday as perhaps the fear trade has reemerged. Both Treasuries and oil rallied on headlines that Israel is preparing for an imminent attack from Iran or from Iranian proxy.
Fear levels were further elevated, the result of US government officials stating a terrorist attack similar to the one Russia experienced several weeks ago is very plausible in the US.
Some analysts on Bloomberg dismissed such notions as only political grandstanding, in attempt to pass the stalled FISA bill (foreign surveillance) in Congress. Those who share this view believe the FBI Director is fearful of bureaucratic shrink if funding is not achieved.
Some suggests trust is eroding in the government, perhaps the result of the extreme partisanship and ideologues, utilizing social media to incite others to support of one’s view.
Leadership is not about dividing and conquering. It is about uniting and finding commonalties. The tribalism that is now being exhibited in the US is starting to rise to the tribalism of failed sub–Saraha African nation.
Society is angry for a myriad of reasons. The populace is tired of being told things are great when in reality society thinks they are not, validation from a recent WSJ poll that indicated by 2:1 margin (56% to 25%) that the economy has gotten worse rather than better over the past two years.
If there is an extension of hostilities in the Middle East, the potential outcomes are infinite. It is often written the moment the first shot is fired even the best planned war strategy is no longer valid.
We are perhaps living in a tectonic time, where the potential outcomes are infinite. We will overcome but it has the potential to be ugly where volatility may rise.
Commenting on the mega size financials first quarter profits, generally speaking loan portfolios are performing well, there is deposit flight and net interest margin are stable.
Earnings season accelerates this week, and most will scrutinize the results for the impact of inflation and higher wages.
The economic calendar is comprised of retail sales, several manufacturing statistics, housing data, and the Index of Leading Economic Indicators.
Last night the foreign markets were mixed. London was down 0.41%, Paris up 0.76% and Frankfurt up 0.84%. China was up 1.26%, Japan down 0.74%, and Hang Seng down 0.73%.
Futures are about 0.30% on speculation that diplomatic efforts will help prevent the conflict between Iran and Israel from escalating. Oil is down about 1%. The 10-year is off 11/32 to yield 4.57%.
