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Wall Street Analysts Respond To Mueller’s Grand Jury Subpoena

Courtesy of ZeroHedge. View original post here.

Despite constantly being told the market's rally has nothing to do with President Trump (as he claims ownership), stocks, bond yields, and the dollar all stumbled notably when two unnamed sources familiar with the matter reportedly said Special Counsel Robert Mueller has impaneled a grand jury in Washington to investigate allegations of Russia’s interference in the 2016 elections.

While stock investors 'bought the dip', The Dollar and Bond Yields remain near the lows.

White House press secretary Sarah Sanders responded to the Mueller Grand Jury Questions

Ty Cobb, special counsel to the president, said he wasn't aware that Mr. Mueller had started using a new grand jury.

"Grand jury matters are typically secret," Mr. Cobb said. "The White House favors anything that accelerates the conclusion of his work fairly….The White House is committed to fully cooperating with Mr. Mueller."

Former FBI Director Jim Comey said three times the President is not under investigation and we have no reason to believe that has changed.

And Wall Street analysts are starting to consider the implications… (via Reuters)

Jim Paulsen, Chief Investment Strategist, The Leuthold Group

"We're going to get a fair number of these headlines. It's going to take a while, whatever happens. Anything that represents volatility is an automatic sell (for stocks).

"I’m not even sure if beyond the volatility there’s much of Wall Street that would get terribly upset if (Trump) got impeached. That would give them (current Vice President Mike) Pence, and likely full power for Republicans and maybe some policies being enacted including health care, tax reform and a fiscal spending program. Even reinforce less regulations.

"From a Wall Street standpoint I can’t say over the long term that (a Trump impeachment) would be a bad result for stocks. The uncertainty of going through it all would be a negative, but I’m not sure the market would remain lower for long, assuming all else is equal."

Axel Merk, President & CIO of Merk Investments

“Given that Trump’s approval rating is very low, and given that it might be all but impossible to find a jury that hasn’t heard of the allegations, odds are this jury might be leaning against Trump.

This is yet a negative for the administration, and with that, if recent months are any guide, it is a negative for the dollar. And so yes, sure enough, the euro rallied on this. This is good news for the euro, this should be good news for gold…and it is ultimately a negative also for risk assets only for the reason that the Trump agenda has ever more difficulty of being realized because it does weaken the presidency. The hopes for real growth picking up are just diminishing the more headwinds the administration is getting.

Chis Zaccarelli, CIO of Cornerstone Financial Partners

"To the extent that people are afraid something will happen to the presidency of the United States, whether that brings us closer to impeachment or serves as a further distraction for the administration, neither of those are good for the markets or a risk-on position."

"It's more distraction for the White House and less stability … It definitely was market moving. The timing lines up perfectly.  The immediate drop was probably computer driven but people aren't taking advantage of the dip."

Juan Perez, Currency Strategist, Tempus

”The world is paying attention and ultimately currencies are weighed to measure the stability of a country, whether you can have faith in what’s going on or not … I think with this investigation and the constant bombardment of news out of the White House the rest of the world is starting to see this image of somewhat of an unstable U.S., which is somewhat unprecedented. And now politics, even more than economic data, is really a driver of dollar weakness.”

What’s really going to weigh heavily on the dollar for the remainder of the year is that as long as this investigation continues and there is a probe and the White House continues to work on everything except the economic agenda it’s going to weigh heavily on the dollar. The reaction was certainly immediate (to the news). Looking at it long-term, is this going to affect the dollar in a negative way? Absolutely it is.”

For now it appears to be a 'tempest in a teacup' with impeachment odds up very marginally…


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