Mike Zigmont

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 shortly after the market close.

The opinions expressed below are my own and do not necessarily represent those of Harvest Volatility Management, LLC

Boring with a splash. US equities didn’t do much again, at least when you look at the closing price change. The known catalyst of the morning was PepsiCo’s earnings. PEP beat on earnings and revenues but the stock fell about 35 bps today as investors’ seemed to focus on the volume decline. PEP didn’t influence the market broadly, which we expected. With respect to earnings season,

Friday

delivers the first broadly applicable data.

So what was the splash? The Trump emails.

Donald Trump Jr. released emails which stated that Russia had dirt on Hilary Clinton. Then the meeting with the Russian lawyer took place…. And then nobody knows what happened… yet.

I’m not a lawyer. I’m not a political junkie. I don’t know what foreign relations *

should

* occur when one runs a Presidential campaign and one is teased with info that can help your campaign by a foreign government.

Given my ignorance, I don’t know whether this is a big deal (which the Democrats claim) or a little deal (which the Republicans claim).

That said, it’s got me scratching my head and it doesn’t bode well for the actual passage of legislation. Every bit of drama that hinders Trump’s tax reform, is bearish for US equities.

And that was the splash of the day. When the emails came out, the S&P was flat for the day. It dropped 15 handles

in 15 minutes

. Then it recovered over the rest of the day.

It should be apparent to us that markets have mostly priced in tax reform. If markets change their minds on that front, lookout below.

Today markets changed their mind a little bit for a quarter of an hour. Then markets changed it back.

No big deal.

See you

tomorrow

,

-Mike