While the oil markets continued their ascent in today’s trading session on the back of the attacks in Saudi Arabia – we now have to ask, is the shock over? While many nations are pointing the finger at Iran, despite the fact that the Yemeni Houthi’s have claimed responsibility, President Trump appears to be pulling back from the hostile language. In a tweet yesterday, the President said the US was “locked and loaded” waiting on confirmation that it was Iran. Today, President Trump claims that this is not a big deal and that there are plenty of avenues to make up for the loss in oil. The President needs to be commended for not escalating this further – at least in rhetoric. This is oil and metal that was affected at the processing facility – not American lives. So, will prices stabilize or will this escalate further? It’s anybody’s guess, but let’s pray for de-escalation and peace. Starting tomorrow, the Federal Reserve will begin their two-day FOMC meeting where they are likely going to conclude that further interest rate cuts are warranted. With this recent oil geopolitical risk, the Fed now has cover to go in other direction – to cut or not to cut? Higher oil may translate into higher inflation – don’t cut and perhaps exude their independence because the President and Wall Street want cuts. Or, cut by 25-50bps because this is a geopolitical risk that may escalate and would cause a deepening of the current global economic slowdown – thus cuts are warranted to fend off the downward pressures. This too is anyone’s guess, but the Fed is going to do what the Fed wants to do either way. We still anticipate a cut of 25 basis points. For certain, all eyes will be on the Fed. Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #Recession #Oil #Politics #Invest #Peace #WakeUpAmerica
What a weekend folks! Where do we even begin? The attacks on Saudi Arabian oil processing facilities has halved their production capabilities – sending ripples across global markets. At the time of this podcast, oil prices are up 10%. Secretary of State, Mike Pompeo, has already officially stated that he is blaming the Iranians. The Iranians deny the allegations, but have stated that if all US sanctions are lifted, that they’ll adopt a policy of “maximum production” to make up for the loss in output from Saudi Arabia. Meanwhile, President Trump claimed on twitter that we are “locked and loaded” should it be proven that Iran is the culprit. So there is a slight disconnect between the President and his Secretary of State. New sexual assault allegations levied against Supreme Court Justice Brett Kavanaugh are sure to bring even more divisiveness to Washington DC. Purdue Pharma, the maker of OxyContin, the powerful pain-killer, has filed for bankruptcy – could this begin a wave of more bankruptcies? However, their decline has been on the back of recent lawsuits that have awarded billions of dollars to victims. Economic data out of China has come in weaker across the board – industrial production, retail sales, and fixed asset investment. Also, their might be a strike in the works between the UAW and General Motors. This would be the first strike in 12 years – shortly before the onset of the Great Recession. Major central banks are scheduled to meet this week – the Fed, BOJ, BOE, and PBOC to determine monetary policy or provide guidance as to their future decisions. With the recent attacks in the Middle East coupled with higher oil prices, might central banks become concerned with inflation? Or will they use the attacks as another excuse to cite geopolitical risk(s) as a reason to continue cutting interest rates? Lastly, and perhaps a positive note – North Korean leader, Kim Jong-Un has sent a letter to President Trump inviting him to Pyongyang. As long as talks are continuing, then it’s less likely that both nations will be at war – this is a good thing and let us pray for peace and prosperity. These stories will continue for several weeks. Stay diversified, stay vigilant, and stay with The Kapital News. #Peace #NoWar #Recession #Economy #Politics #Oil #Invest
So the 3rd Democratic debate took place this evening in Houston, Texas. As we make our way further into the 2020 Presidential campaign, we are starting to see the Democratic field dwindle. It was only a few weeks ago that there were over two dozen candidates – now we’re down to about a dozen. While there were only 10 candidates on the stage this evening given the guidelines as established by the DNC, there are still a couple other candidates on the sidelines. During the 3-hour debate there was much discussion centered around healthcare policy. Jabs and uppercuts were thrown at the frontrunners – Joe Biden, Bernie Sanders, and Elizabeth Warren. All held their own and continue to drive policies that resonate with a sizeable portion of the electorate. We anticipate the attacks will increase in volume and will become rhetorically sharper as we make our way through the process. Other topics discussed were focused on gun control, climate change, and immigration. It’s pretty much the same old talking points and ideas from the Democratic party, which will not solve the issues facing this nation. Unfortunately, the policies from the Republican side are not solving them either. In other news, the US deficit has officially hit $1 trillion. The first time since 2012 when the nation was still making its way out of the Great recession. And there’s still another month to go in the current government fiscal year, which ends at the end of September. In addition, we have inflation figures at an 11-year high. Don’t forget that the Federal Reserve meets next week to determine interest rates. We have 50-year low unemployment at 3.7% and inflation around goal, and stock market indexes about to hit all-time highs – so why should the Federal Reserve cut rates? Perhaps they just want to follow the ECB, which did cut rates further into negative territory. Also, the central bank has agreed to another round of QE, with 20 billion Euros a month of bond-buying starting 1 November. It was only nine months ago that the ECB ended their last QE program. Clearly, it is not working and the central bank lowered both their forecasts for inflation and growth. Perhaps an admission of sorts that their “stimulus” measures have not worked – so why will they work this time? Stay diversified, stay vigilant, and stay with The Kapital News. #DemsDebate #Recession #Politics #Economics #EndTheFed #WakeUpAmerica #Peace #2020
It’s breaking news by tweet on a near daily basis. Well today and this evening we came across two newsworthy stories. First, President Trump is now calling for the Federal Reserve to cut interest rates to 0 or perhaps even lower. This of course would mean bringing negative interest rates to the US. The very monetary policy that is destroying the financial system in Europe and Japan is now being called for by the commander-in-chief of the US. This is in addition to repeated calls for not only lower rates, but also further rounds of QE. These are emergency monetary measures that were implemented during the depths of the Great Recession – why then would the President call for such measures? We have a multi-decade low unemployment figure at 3.7%, inflation nearing the Fed’s target of 2%, and the major stock market indexes nearing all-time highs. In addition, the President repeatedly claims that this is the greatest economy in US history – so why call for emergency monetary measures, Mr. President? The second round of tweets sent out this evening was in regards to the US-China trade war. The increase from 25% to 30% that was set to go into effect on 1 October will now be delayed, in the name of “good will,” until 15 October. Just the other day, the Chinese added a handful of US products to their tariff exemption list and so this is the US reciprocating to some degree. The 1 October date is also the 70th anniversary of China. Stay diversified, stay vigilant, and stay with The Kapital News. #Recession #NegativeRates #USChinaTrade #TradeWar #Economics #EndTheFed #WakeUpAmerica #Politics #2020 #Peace #FireNavarro
It matters not the direction, North, South, East, or West, all regions of the globe are undergoing some major shift. Whether it’s Brexit in the UK, escalation with Israel, Lebanon, and Iran, India and Pakistan, Hong Kong protests, the US-China trade war, or others, the conclusion to these stories will affect the future of the geo-political landscape for generations. The Kapital News is a strong advocate of peace and prosperity, and let us pray this is the outcome. Yet with all the “strong-man” tactics and antics being played out by nearly all countries, the probability of a civil resolution to all areas, is unfortunately very low. Things on tap throughout September will be low-level US-China trade talks, global economics figures will be published, major central banks will be making monetary policy decisions, and then there’s always the wild-card. Stay diversified, stay vigilant, and stay with The Kapital News. #Economics #Brexit #USChina #TradeWar #Politics #Recesion #Investing #Peace
So many headlines and so little time. The deadline for Brexit is now only a couple of months away and UK Parliament is no closer to striking a deal with the EU or amongst themselves to leave with a deal. PM Boris Johnson was shot down a few times already as the new PM – with Parliament voting to strike down the possibility of leaving the EU without a deal. This led the PM to call for a snap election for 15 October, which was also struck down by Parliament – at least for now. Given the many back and forth tactics and antics, we imagine there will be more calls for a general election. In Hong Kong, the Chief Executive, Carrie Lam, has formally removed the highly contentious extradition bill from consideration. This bill is a main cause to the 13 weeks of protests, which have shut down several parts of Hong Kong. While this was a big issue for the protesters, the question becomes, will this be enough to end the protests and riots? On the US-China trade front, despite escalation from both sides, there has been a formal announcement that high-level talks will resume in Washington DC in October. All and any outcome is pure speculation, so we shall wait for the results. We lastly discuss the divergence between the main US equity indices against the bond market, the internals of the US stock market, precious metals, and commodities, given their movements, they cannot all be right. One group points to growth and the other, a slowdown. Well, which will it be? Stay diversified, stay vigilant, and stay with The Kapital News. #Brexit #HongKong #USChinaTrade #TradeWar #Economy #Recession #Politics
So there’s more drama surrounding British politics and the saga that is Brexit. The PM, Boris Johnson has decided to suspend Parliament, thereby calling for the Queen’s speech. This is a common practice for a new PM and is a highly ceremonial process, which of course is comprised of a speech by the Queen. However, what makes this time slightly different is the fact that this suspension will be longer and comes during a time when the 31 October Brexit deadline is drawing near. This means that there will be fewer days available for members of Parliament, MPs, to debate Brexit. They have had three years and there is still no deal that has been agreed by the British government and the Parliament. What do these politicians think they can actually achieve with another few weeks of discussions? Of course the actions taken by the PM have further divided an already polarized Parliament and country and it can be expected that protesters will take to the streets and there may even be a vote of no confidence of the PM. The people voiced their opinion back in June of 2016, it is now time for the British government to make good on that referendum – deal or no deal.
Italian PM Giuseppe Conte resigned today as tensions between the coalition government came to a boil. The coalition of the far-left Five Star Movement and the far-right Lega Part is no more. Lega Party leader, Matteo Salvini, is seeking to become the country’s next PM. His rise to power over the last couple of years has been consistent with the growth is nationalist and populist movements the world over. Emboldened by recent EU Parliament elections, Salvini has the PM post in his cross-hairs. It is not certain that he will win, but should he, this will cause many more headaches for the top brass within the EU. As the Brexit saga continues to unfold, will the EU next have to deal with an Italeave? If they do, this is all but the kiss of death for the “European Experiment.” In other news, global markets continue their whip-saw movements, yet still find themselves range-bound. This consolidation will not be long-lived and they will break-out either strongly to the upside or to the downside. So be sure to stay diversified, stay vigilant, and stay with The Kapital News. #Italeave #Brexit #EU #WakeUpAmerica #Economics #Politics #Peace
We discuss the EU election results. While we were anticipating a larger cohort of Eurosceptics and populists being sent to the EU parliament, there still was nevertheless an increase of populist candidate victories. This will undoubtedly change the dynamics of European politics, yet many questions still remain.
UK PM Theresa May tendered her resignation today, yet she will remain on until the end of July until her replacement is determined. It has been an uphill battle for Mrs. May since the very start for her, but she was nevertheless unable to get a deal through to provide for Brexit. What happens next is anyone’s guess and don’t forget we are also in the midst of the EU elections. Additionally, despite President Trump claiming that he does not want war with Iran, he has decided to send at least 1,500 troops to the Middle East. Recall there is also an air craft carrier strike force in the area as well. There was also an emergency declared by the President so that he could bypass Congress in order to expedite the sale of arms and ammunition to US “allies,” in the Middle East. There are words and then there are actions, let us hope and pray that there is no war.
