One month ago, a media frenzy broke out after the WaPo reported of mass voluntary resignations at the State Department, to protest the arrival of Rex Tillerson. Shortly after, it was revealed that not only was it not a "mass resignation" (there were only four high level resignation) but it was all procedural, meant to streamline the transition from one administration to the next.
While US equity markets drift endlessly higher on sea of Trumptopian euphoria (and retail ETF ramps), European equity investors have hit the panic button this week.
In the last week, investors have been piling into European VIX futures - hedging for a potential catastrophic end to the market calm ahead of French and Dutch elections.
Historically, European 'VIX' has traded around 20% higher than US 'VIX' over the last 8 years. The current spike to an 80% premium is unprecedented.
Let me be clear about this, the trend over the last year in Crude Oil is up as it has created a series of higher lows and higher highs.
After previously announcing plans to withdraw at least $15 billion to fund 2017 budget deficits, the $860 billion Norwegian sovereign wealth fund announced last December that it would change it's portfolio allocations to try to make up for the withdrawals. The change would eventually result in 75% of the fund's capital being allocated to global equities, up from the previous 60% allocation...you know, because equities never go down so more is always better.
In a note by Evercore ISI's Terry Haines and Ernie Tedeschi, the analyst duo pours cold water on Trumps' budget proposal before it has been even formalized and confidently predicts that "Trump budget not happening" adding that the most likely outcome is that "Congress will modestly hike defense and non-defense spending."
Below is a summary of their thinking: