Market Briefing For Wednesday, May 3

Mending fences will likely be the topic once we get past the FOMC move or non-move Wednesday afternoon. The topics will focus to not only Putin's and Trump's 'cordial' telephone call (which we've heard little about besides a quip from Moscow that they plan to meet at G20 in Germany which was not confirmed by the White House); but to China and Russia's Foreign Ministers urgent telephone calls today, discussing a common policy with regard to the North Korean 'crisis' brewing, which seems to continue putting Russia and China, and the United States, essentially on the same page.

This morning Pyongyang hurled more threats against the United States and thus (at least so far) did NOT respond favorably to the overture given just a day earlier by President Trump. That's the importance of the 'context' we'd discussed last night. Also today the first of several Global Hawks arrived at a US Air Base in Japan; for overflying Korean areas as may be called upon.

The 'mending fences' also applies to Syria, as Putin and Trump seemingly (rumor has it) are working on a joint policy which would align our interests; a seriously important consideration that so many seem to be opposed to. We don't know, but seem like a good time to find common ground in a number of areas of potential dispute or stress; and perhaps that includes Ukraine.

Right now there's no change in the market behavior; other than impressive, considering the bank stories; and other concerns, along with the comments by the Saudi Prince and others about OPEC and No-Pec being on similar pages with regard to lower oil production. However that's not real-world stuff if you look at both Iran and Iraq exceeding quotas at present flow rates.

In sum: No market changes yet, but this complacent neutrality won't endure for long in our view. Ideally a higher-high results from 'chop' in the wake of the Fed decision, then maybe faded (perhaps within hours or a day or so).