E-Mini S&P 500: Up on Trump.

Sentiment is leaning toward believing that US President Trump may deliver on those overdue Tax cuts and reforms. Thursday, the Senate approved a budget measure that may enable Republican leadership to initiate changes to the US tax code while not impacting the budget deficit badly. Trump is interviewing and honing in on a possible Fed Chairperson. Jerome Powell, John Taylor and of course our current Fed Chair Janet Yellen may all be considered. The market will possibly react more to the deliverance or the inaction with more velocity than with earnings. Inflation still remains a muted 1.3 % a far cry from the Feds 2 % target rate. The last employment report came in at -33,000 due to the hurricanes that tormented parts of the US. US President Trump has been interviewing for the Fed Chair next year and Jerome Powell has now come under the spotlight. One thing that he may represent is a dovish Fed keeping the accommodative lower interest rates. The Fed speaks and the market typically will react. The next Fed meeting is October 31st - November 1st. The December Fed meeting is scheduled December 12th - 13th. It is anticipated that a rate hike may be on the table for the December meeting. The hurricanes have caused destruction and in the near term will affect the economic activity. Higher energy costs due to the storms may boost inflation in the short term. Their stance was accommodative, but they intend to begin to wind down the quantitative easing in October by reducing its $4.2 trillion of holdings in US Treasury Bonds and mortgage backed securities. Expecting a tightening in the labor sector may over time boost wages as well thus contributing further to consumer spending. Inflation seems to still be baffling to the Fed, but may be addressed by an alteration of monetary policy. US Fed Chair Yellens term ends on January 31st 2018. Trump is interviewing potential candidates at present. He may make a decision soon. The market may react to his selection.

Todays Existing Home Sales SAAR for September were 0.7 % or 5.390 million annualized rate while the previous reading was 5.350 million annualized rate. The Treasury Budget Level for September was $8.0 billion while the previous reading was -$107.7 billion. The Nonfarm Payrolls was a shocking low of -33,000, a very dramatic result of the hurricane effects while the last monthly employment report showed 156.000. The Unemployment Rate was 4.2 % while the last reading was 4.4 %. Private Payrolls was -40,000 while the previous reading was 165,000. The Average Hourly earnings was 0.5 % while the previous reading was 0.1 %. The Average Workweek was 34.4 hours unchanged. Manufacturing payrolls were -1,000.00 while the previous reading was 36,000. Hospitality and leisure payrolls were down 111,000 while the bars and restaurants were down 104,700. The Participation Rate was 63.1 % while the previous reading was 62.9 %. The Q2(f):2017 Real GDP was no surprise at 3.1 % while the previous reading was 3.0 %. The expansion of the US economy is both expected and welcome along with US President Trumps tax cuts and reforms. Of course, there is still the implementation of these cuts. There is a sentiment that the tax cuts may be of little worth to some. The GDP Price Index came in at 1.0 % while the previous reading was 1.0 %. The Real Consumer Spending was 3.3 % while the previous reading was 3.3 %. The strength of the market may be propelled by sentiment and the sentiment sets the stage for a higher trade. Once achieved, then a retracement may ensue. Any further sparring with North Korea can impact the market negatively along with any further doubt about the reforms and tax cuts projected by US President Donald Trump. The tax cuts and reforms seem to be stifled by the US budget deficit. The government runs on our tax dollars and the lack of those extra taxes cuts into what we pay down the deficit with. The US government needs to find additional revenue and that may be tricky. Economic growth may increase revenue, but that must come from expansion which has not come to fruition as of yet. The E-Mini S&P 500 seems unstoppable, yet this is the time to worry. This is the season where it may typically retrace. The fall is a time historically where the market has made some significant sell-offs, so this is the time to trade with caution. We remember black Monday in October of 1987.

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Todays E-Mini S&P 500 (December) traded $2574.50 to $2559.50 an inside to higher day. The E-Mini S&P 500 is in a bullish stance unless it can penetrate $2542.50. Mondays range for the ESZ7 could be $2575.50 to $2550.50, an inside to lower or inside day. The VIX was down -0.80 % to $9.97. The VIX may trade inversely to the E-Mini S&P 500.

The EIA reports the Crude Oil Stocks were a draw down -5.73 million barrels. The Motor Gas Stocks were a build of +0.91 million barrels. The American Petroleum Stockpiles reports the Crude Oil stocks were down -7.1 million barrels. The Motor Gas stocks were up+1.9 million barrels. OPEC reports commercial stockpiles in OECD countries decreased to 3.002 million bpd during July. The OPEC data showed the cartel crude oil production was down by 79,000 bpd and the non-OPEC supply was decreased by 32,000 bpd for August. Energy analyst at Goldman Sachs projects that the estimated US Crude Oil demand may decline by about 900,000 bpd due to the impact of the hurricanes. Saudi Energy Minister agrees with UAE that it may be considered to extend the oil supply reduction past the March 2018 time frame.

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