The Market, Energy, And Political Page, Part 5, T+1 -- Wednesday, November 7, 2018 -- Nothing About The Bakken

Something tells me the "daily note" is going to be busy, busy, busy for a few weeks.

Less than eighteen hours after the results of the midterm elections are known (for the most part), Season 3 of the Trump Presidency has begun. Season 2 was a short season, beginning only back in July, 2018. Until the "official" poster comes out, this will have to do:

So, with a new season, we should see some new characters come on board, while others depart. Already, one supporting actor has submitted his letter of resignation, US Attorney General Jeff Sessions. It sounds like Interior Secretary Ryan Zinke may be dusting off his resume, too. One wonders what part his inability to get Matt Rosendale elected to the US Senate played a part in all this. It sounds like Trump has a few more in mind who are likely to go through the DC revolving door. And that will leave room for Nikki Haley. The very last reporter at the long, long press conference today asked Trump a leading question; he ignored the question, though it was asked repeatedly, but my hunch is that he was doing all he could to keep from spilling the beans regarding Haley's future.

By the way, a digression: with the GOP holding the US Senate, the president has a bit more "room" when it comes to thoughts about what to do with Mr Mueller.

On a different note, it certainly looks like the mainstream media has never played chess. Using chess as an analogy, the GOP lost a couple of pawns in the midterm election yesterday but the Democrats lost a lot more. The biggest failure for the Democrats was the inability to get "Beto", a pawn" to the back row where he would have become a rook or a queen. He was taken out by a rook, Ted Cruz, perhaps with the help of the king (castling) one row short of his goal. The Democrats also lost a bishop or maybe even a queen when Heidi Heitkamp lost. She wasn't all that powerful, but had Heitkamp held her seat, and had Beto won in Texas, it's very possible the US Senate would have flipped, along with the US House.

The mainstream press seems absolutely surprised the US House flipped in the midterms: this regularly happens, they say, in the midterms, and, not only that, the polls all showed that it was going to happen. But the press will try to convince Americans this was a huge Trumpian loss. LOL.

 

I listened to a bit of Rush today. I was surprised he was so "negative" about the results. I agree with Trump. He said he would rather have lost the US House than to have held it by one or two seats. 

The market certainly likes what it sees. The Dow (irrelevant) is surging, up 500 points and will probably not be any higher by the close simply because the market is governed by fear and greed, and at 500+ points, we are well past "greed" and getting into "fear."

The market is having the best "midterm day" since 1982. From wiki (something the mainstream press might be advised to read):

The 1982 United States House of Representatives elections was an election for the United States House of Representatives held on November 2, 1982, in the middle of President Ronald Reagan's first term, whose popularity was sinking due to economic conditions under the 1982 recession. [2018: the US equity market "in correction"; some sectors were in/near bear market conditions.]

The President's Republican Party lost seats in the House, which could be viewed as a response to the President's approval at the time. Unlike most midterm election cycles, the number of seats lost—26 seats to the Democratic Party—was a comparatively large swap. It included most of the seats that had been gained the previous election, cementing the Democratic majority.

Coincidentally, the number of seats the Democratic picked up (26), was the exact amount the Republicans needed to win the House majority. In the previous election of 1980 Republicans gained many seats as the result of the popularity of Ronald Reagan. Many of these elected officials lost their seats in 1982. [2018: the Dems gained 35 seats in the US House.]

I had the day off. I took advantage of that by watching CNBC. Every CNBC anchor seemed shocked -- shocked -- by the market reaction. Every pundit, it seemed, was talking off the same set of talking points, mainly that the market was happy to see that we will see gridlock. I disagree completely. Trump has it right -- which he articulated at his very, very long press conference. He was unable to negotiate with his own party in the US House. Now, with Nancy Pelosi in charge, he has someone with whom he can work. At least he has no false hopes. Think Jeff Flake.

Having said that, Trump - Pelosi - Flake, sounds really wonky. The market tells me this: investors interpret the midterm results as a Trump win.

What I love most: all analysts said this was all expected. LOL. My hunch: Jim Cramer, a) will say the same thing; he predicted it; and, b) will take credit for staying calm and remaining fully invested. LOL.