Monday, stocks fell slightly in Asia, 1.1% in Europe, and 0.7% in the U.S. on strong volume. The VXO rose 8% to close at 10.63 as the Dow Jones Industrial Average slid back below the 20,000 mark. Tuesday, stocks fell 0.6% in Asia and 0.7% in Europe but rose slightly in the U.S. on very high volume. Precious metals gained 1% while their miners rose three times that amount.
Wednesday, stocks in Asia closed up 0.5%, in Europe up 0.8%, and in the U.S. changed little on high volume. The FOMC met and held interest rates unchanged. Then came a shot across the bow. The following were my thoughts before the meeting:
The Federal Reserve maintains an unholy alliance with the establishment. Some may speculate that since President Trump had committed to drain the swamp, one of his prime targets will be (as it should be) the Federal Reserve.
My guess is that they fear this but believe they may be able to win him over the dark side. Rather than lash out proactively to create a crash at this time, they will likely wait and try to get him to play ball with them. As a result, I believe they will not raise interest rates at this meeting.
Thursday, stocks fell 0.3% in Europe but closed little changed in Asia and the U.S. on strong volume. Friday, stocks fell 0.3% in Asia but rose 0.6% in Europe and 0.9% in the U.S. on strong volume as an Executive Order to review Dodd-Frank regulations and put on hold the fiduciary rule order. That’s a start, but we need to return to Glass-Steagall. The VXO fell 7% to close the week at 10.14 as the Dow Jones Industrial Average closed above the 20,000 mark again.