Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide. Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business since 2008, sending it daily shortly after the market close.
The opinions expressed below are my own
Singapore. Equities were down small in the premarkets and opened the same when the Singapore news hit the tape and the market dropped significantly. The summit between Kim Jong Un and Donald Trump in Singapore was cancelled. Equities fell immediately and continued to sink for about an hour. Treasuries rallied during the same period. It was a good old fashioned risk-off reaction. The S&P was off 25 points at the lows of the day (91 bps). That’s not crazy but it’s significant.
By 11 AM, investors didn’t think the Singapore news was that worrisome and the tape climbed steadily until the afternoon. Then we bobbed around into the close. Capital flow was light again (87%).
Today was a little bit interesting, so that’s a nice change but forgive me if I don’t dance a jig.
The North Korean situation seems to be the same as the last 20-plus years. There was a window of optimism lately and now the window’s closed. From an investing perspective, is a belligerent but essentially inactive North Korea significantly different from a friendlier but inconsequential North Korea?
Unless one thinks this is the beginning to an intense military conflict it strikes me as a big nothing.
As people think more about this summit failure, I think the market view becomes one of indifference.
The long pending weekend doesn’t hurt either. The markets are checked out and half-asleep.
See you tomorrow,