The flight to safety is on as banks get crushed and gold surges.
A portion of today’s note from Art Cashin: Other Fed Credibility Dings – They did not set up a July press conference thus raising enormous doubts that any kind of move is possible in July.
The vote to stand pat was unanimous. Where all those regional Fed presidents, who a week or two ago, were hanging on a June move and even follow-ups. There was a dissent in April but not one in June?
Futures are a hair away from declaring no hike this year. Credibility?
Hints She Said. Hints? – One of the more interesting, or maybe one should say “jaw-dropping” moments of the Yellen press conference came when a reporter asked her why, after the minutes of the April meeting showed that most favored a potential June move, the April statement did not have such a clear indication?
After a minute and a half of verbal tap dancing, the Chair declaimed that there was a “hint” in the statement. A hint? A hint? This is not a crossword puzzle. It is the closing statement (an assumed summary) of the temporary thinking and policy of the very important FOMC. Do we need to get a decoder ring?
Overnight And Overseas – The flight to safety is on. Swiss, Japan and British central banks all stand pat as did Fed. Brexit talk still bubbles.
Tokyo whacked for 3% (530 Dow points) as yen soars to nearly a two year high. Hong Kong also dinged but “only” 2%.
In Europe financials are getting hit with major banks getting crushed.
Safe haven bonds are on fire with a wild scramble on German, U.S., and Japan paper. Gold (the only currency without a central bank) is nearing a two year high. Euro is getting crushed with dollar and yen soaring.
Base metals and crude are lower. Even grains are under pressure. A rather tumultuous morning.
Consensus – Central banks begin to look powerless and possibly witless at this point. A bit oversold so they may try to circle the wagons. The close could be whacky in front of a huge quarterly Expiration tomorrow with several indices being reweighted. I apologize for not being in tomorrow but have a commitment I can’t switch. Stay wary, alert and very, very nimble. Have a good day and have a wonderful weekend!
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