Stocks Take Extra Day Off As Impeachment Trial Opens, Virginia Protest Ends Peacefully

Almost everybody got back to work on Tuesday, following the Martin Luther King Jr. holiday, including those who traveled to Richmond, Virginia to rally in support of the second amendment and congress, which eagerly got started on the impeachment trial of President Donald J. Trump.

The scene in Richmond was inspiring, if not daunting to those who oppose gun rights in the United States and elsewhere. The display of firearms - from shotguns and .22s to ARs, semi-automatic weapons, handguns and even a .50-caliber tank-buster - was impressive to say the least. The massive demonstration of an armed populace acting in a very peaceable manner without incident (only one arrest was made) served as a reminder of what America is all about: a free people willing to defend their rights against tyranny.

In congress, it was another kind of spectacle, with the managers from the House of Representatives sparring over trial rules with the president's legal team. The arguments by the House members who stand as prosecutors fell largely on deaf Republican ears as every one of the eleven proposed amendments brought up by Democrat leader Chuck Schumer was defeated along party lines, 53-47, bar one. Maine Senator, Susan Collins voted with Democrats on the 10th amendment proposed by Schumer, which would have allowed more time for both sides to respond to trial motions, but it still went down in flames, 52-48.

The marathon session lasted well into the night, finally adjourning just before two o'clock am. The defeat of the Democrats was resounding and bodes well for the president as the parties will begin making their cases when the House managers begin three days of opening arguments on Wednesday at 1:00 pm ET.

While the rhetoric was fiery and impassioned by both sides, the issues raised by the president's lawyers seemed more authentic and serious. Most of the Senators seated in the chamber are well aware that the charges levied by the Democratically-controlled House - Abuse of Power and Obstruction of Congress - are neither crimes nor are their arguments particularly well-founded. The president and his team have roundly criticized the entire impeachment process as a "sham" and a political exercise, the charges not even close to rising as impeachable offenses.

Nevertheless, House managers will have three eight-hour sessions over the next three days in which to plead their case, taking the trial through Friday. The president's defense team will also have the same allotment of time - 24 hours - to offer their case, on Saturday, Monday, and Tuesday, also in three eight-hour sessions. It's looking like the president will be acquitted on both charges in a reasonably short manner.

While there is still the possibility of calling new witnesses and adding documents, the Republicans in the Senate are unlikely to move forward on those grounds, considering that the House should have done its job better to make its case against the president without having to conjure up new charges and ddrag the country through a drawn-out, ridiculous process that could stretch into months of useless debate.

Meanwhile, Wall Street wasn't very upbeat about anything, as stocks took a rare nosedive to open the week's trading. Led by the Dow Industrials, losses were not substantial and would likely not lead to any more selling activity. Besides the Fed's nearly-continuous pumping of fresh cash into the hands of hedge funds and primary dealers (big banks and brokerages), the global outlook is a few shades light of gloomy while the rich and not-so-famous convene at Davos, Switzerland this week for the 50th annual World Economic Forum.

Business and political leaders from around the world heard President Trump speak on the glories of his "America First" policies, followed by another round of adult-shaming by eco-warrior princess, Greta Thunberg. The two cancelled each other out to some degree, though Trump's speech was longer and much more compelling than Thunberg's seven-minute screed.

Even with stocks lower, gold and silver took substantial hits at the start of the day and failed to recover to any great degree. WTI Crude oil futures continued to test the upper resistance at $58/barrel and failing, while the 10-year note was bid, finishing below a 1.80% yield for just the second time this year.

All told, it was a good day for non-financial activity, though the trading hardly reflected that. Instead, markets are displaying the kind of activity seen when stocks are overbought, as they currently are. Short-term, there's potential for a more sizable pullback, though it would take a gargantuan effort to offset the machinations of the Fed, which now has wrested nearly complete control of almost all markets.

Until the Federal Reserve takes its foot off the liquidity gas pedal, stocks should continue to outpace all other investments.

At the Close, Tuesday, January 21, 2020:
Dow Jones Industrial Average: 29,196.04, -152.06 (-0.52%)
NASDAQ: 9,370.81, -18.14 (-0.19%)
S&P 500: 3,320.79, -8.83 (-0.27%)
NYSE: 14,109.98, -73.22 (-0.52%)

WEEKEND WRAP: Virginia Lobby Day and Trump Impeachment Trial Take Center Stage

It being Martin Luther King Jr. Day, markets in the US are closed, but that didn't stop what looks to be more than 50,000 (actual number was about 22,000) patriots from heading down to Richmond, Virginia for the state's annual "Lobby Day," usually an opportunity for Virginia citizens to meet with their legislators and discuss various agendas facing the state.

This year, most people won't even get a chance to see a legislator, as Governor Ralph Shearer Northam (he of blackface shame) last week declared a state of emergency for the state capitol from January 17 to January 21, over fears of violence stemming from the gun rights crowds expected.

Northam was wrong to declare the emergency. After all, beyond the extra police presence, there are so many well-armed citizens in attendance, anybody thinking of causing trouble would probably think twice.

It's still early, and very chilly, in Richmond right now, but so far, the crowds have been peaceful. The day should end without incident unless something gets stirred up by anti-gun reactionaries like Antifa or a false flag event staged by one of the three-letter agencies overseeing the ongoings.

With many live streams being broadcast and thousands of people with cell phones, it's unlikely anything underhanded should happen, and if something does happen, it's likely to be recorded. This isn't going to be a rerun of the melee at Charlottesville back in 2017.

If Virginia's Lobby Day doesn't produce any grotesque footage for the fake media, then Tuesday, all eyes will turn to the impeachment trial which opens in the Senate. This is another made-for-TV type event, but Republicans led by Mitch McConnell (R-KY) are doing their level best to blunt the desired effect the Democrats are seeking, which is to drag out a long trial, complete with new witnesses, demands for documents, calls of a cover-up, issues of executive privilege ruled upon by the Supreme Court and other such nonsense.

The impeachment of President Trump was a sham from the start, when Intelligence Committee chairman Adam Schiff launched a plot and counseled a "whistleblower" over a single phone call made by Trump to Ukraine president Zelensky.

Drawing from shades of the Bill Clinton impeachment, there never was, nor never will be any "there" there.

If cooler heads (Republicans) prevail, this sorry escape into stupidity should be all over in less than two weeks. Many Americans wish it could end in two days, if not sooner.

With all the tumultuous political theater taking place it's a wonder that stocks move at all, especially in an upward direction, though the recent buying spree - which began in September 2019 - has been aptly aided by continuous money printing and liquidity being shoved into the REPO market by the Federal Reserve. Until the Fed ceases its now-daily operations, stocks will never suffer losses. It's just a matter of fact. Like Warren Buffett supposedly quipped, "Give me a trillion dollars and I'll show you a good time, too."

Meanwhile, inflation will be ramping up sooner, as per the wishes of the Fed, whose various voices and charts keep telling the American public that the US economy hasn't yet met their target of two percent inflation, as if higher inflation were a good thing (it's not). All along, however, inflation has been raging in health care, education, and housing, but those factors are not apparently part of the Fed's purview. Therefore, they continue to print at a rate faster than previous bouts of QE while Chairman Jerome Powell insists this round of liquidity pumping is "not QE."

Sure, we'll buy that. And that horse over there is actually a rabbit.

Just how hard has the liquidity pump been working?

Since mid-October, on a weekly basis, the Dow has been up 10 weeks, down three; the NASDAQ, since late September, 14 weekly gains, two weeks with losses; S&P: 13 up, two down; NYSE: 13 up, two down.

That's a nice-looking rabbit ya got there. Mind if I ride him?

At the Close, Friday, January 17, 2020:
Dow Jones Industrial Average: 29,348.10, +50.50 (+0.17%)
NASDAQ: 9,388.94, +31.81 (+0.34%)
S&P 500: 3,329.62, +12.81 (+0.39%)
NYSE: 14,183.20, +41.40 (+0.29%)

For the Week:
Dow: +524.33 (+1.82%)
NASDAQ: +210.08 (+2.29%)
S&P 500: +64.27 (+1.97%)
NYSE: +225.23 (+1.61%)