Investors may be doing extra time at the watercooler today, after POTUS pulled an “Apprentice”-style “You’re fired” on a clearly surprised FBI Director James Comey.
Comey wasn’t the only one caught out. While stocks have shown their chops in rolling with the political punches under this administration, there’s a bit of unease out there for Wednesday. The worry is this latest move could annoy some Dems and Republicans, making it tough for President Donald Trump to get his tax changes passed down the road — which many say this market needs to keep pushing higher.
Fear not, says Greg Valliere, chief global strategist at Horizon Investments. “There’s only two things I see that could really derail this market. One could be a geopolitical crisis — and I don’t see it — and the second would be a sign that tax reform bill is dead — and I don’t see it. It is a distraction,” Valliere told CNBC, in reference to #Comeygate.
On to our call of the day , which deals with another simmering topic for investors right now: Which way are oil prices headed?
Oil has had a rough ride lately, losing 15% over the past three months. But “jumping to the conclusion the market is now unilaterally bearish may be premature,” BNP Paribas strategists say.
Russia is a core reason for optimism in the rationale from BNP’s Harry Tchilinguirian and Gareth Lewis-Davies. They expect the country — a key player in keeping the global oil balance in check — will likely play along with an extension of OPEC-led supply cuts, something the market wants badly.
“The combined OPEC/Russia output restraint should allow the market to make progress on the re-balancing front,” the strategists say.
Other positives they see: Oil demand is expected to rise in the third quarter and supply growth should turn to contraction in some key non-OPEC countries, such as Canada and Brazil. (That’s even if growth in U.S. and Libya supply is taken into account.)
Even Jeff Currie, head of global commodity research at Goldman Sachs, seems to think that there may be too much pessimism out there.
— Sara Sjölin (@sarasjolin) May 10, 2017