The Zigmont Report (Daily Market Recap for 11/6/17)

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 it daily shortly after the market close.

The opinions expressed below are my own

Inch by inch.  US equities made yet another small gain and set new all-time highs.  Capital flow was pretty normal at 106% and the news headlines weren’t very important.  On quiet days, bulls win.  That’s the environment and there’s nothing on the horizon that suggests this dynamic is going to change.

Although markets didn’t appear to care too much, the Saudi corruption purge is an interesting story.  The Crown Prince of Saudi Arabia cracked down on corruption and numerous powerful, wealthy, and connected Saudis were targeted by the crackdown.  Nobody knows what any of this means in the long run.  It might be a wonderful first step for a notoriously corrupt society.  It could be a first step towards a consolidation of power.  It could be the start of something we’re not thinking about yet.  Who knows whether that mystery-thing would be good or bad?

There’s a new injection of uncertainty in the Middle East however.  The oil market is reflecting some of this uncertainty but other global markets are taking a wait-and-see approach.

My conclusion here is simply that from a transformational standpoint, the Saudi news is very interesting.  It has the potential to be incredibly positive, negative, or anywhere in between.  At this early point in the transformation however, investors don’t know how to handicap it and they are treating it like most news in the past year – they are not letting it change the existing financial landscape.

All of this is worth talking about, even though it isn’t affecting markets greatly.

Tomorrow doesn’t look to be very interesting although the Reserve Bank of New Zealand will announce its latest policy decision tonight.  No change is expected and New Zealand isn’t exactly a global market mover but it’s something.

We’ll see if it matters though it probably won’t.

See you tomorrow,