We asked traders what FBI Director Comey's testimony means for stocks and other markets
June 8, 2017 • Reprints
(Photos courtesy: reuters.com)
Before he was fired, former FBI Director James Comey had sought more resources for the Russia probe. In a farewell letter to staff, Comey said the President had the full authority to fire him and would not dwell on the decision. Democrats called for an independent probe of the Russia issue. Then, Comey shared certain information with the media, leading to his hearing in Congress.
With former FBI head James Comey’s testimony on Thursday, we decided it was a perfect time to reach out to our family of experts to ask for their opinion.
While the markets don't seem worried at all about Comey's hearing in Congress--the Dow, after initially trading sideways, jumped to a new all-time high Thursday afternoon toward the end of the highly-anticipated testimony--we wonder what our expert contributors think.
We asked traders: Will former FBI Director James Comey's testimony roil the markets? Should traders protect themselves?
Here's what they had to say...
The Comey testimony will act on the perceived ability of the Trump Administration to get a legislative agenda on
Infrastructure, tax policy, and deregulation through Congress. A bombshell testimony is "risk-off" increasing market anxiety and therefore bearish on the U.S. dollar. If the testimony appears to be trivial, it's bullish on the market.
Abe Cofnas is the author of “Sentiment Indicators” and “Trading Binary Options: Strategies and Tactics” (Bloomberg Press). He is editor of binarydimensions.com newsletter and can be reached at email@example.com.
If Comey’s testimony creates doubts about the Trump presidency continuation which would jeopardize infrastructure, healthcare etc. projects, the expectation would be that the stock market would head lower, the U.S. dollar would get weaker, interest rate futures would increase, gold would increase and crude oil prices would increase.
If the market does react to this, I would expect this reaction to be temporary because it must also be remembered that whatever comes out in the testimony it could be a long time before it actually has a direct impact on the presidential administration. This would mean that if the market does go lower it would be expected to be a short-term break because it would be a market moving lower on the anticipation of what the possibility of future results. This type of movement rarely causes a sustained downward trend.
Dan Gramza is President of Gramza Capital Management Inc. and DMG Advisors, LLC. He provides daily market updates from around the globe on subjects ranging from the Nasdaq and currencies to crude oil and grains at dangramza.com.
The Comey-Trump enterprise is real. It's also oversold, and overly-discounting worst-case scenarios.
James Comey was quoted less during his tenure as FBI Director, than in the past four weeks since his firing. Through his record of previous testimony, hearsay relayed to media by his "friends," and statements by government officials, everyone has come to know Comey's position and perspective on everything.
One problem. Many of the quotes contradict each other.
An assertion made by others about Comey is that he requested extra funds to conduct his election tampering investigation of the Russians. False, according to Deputy Director Rod Rosenstein. Certainly, he'll be asked about this Thursday, but he certainly hasn't said anything publicly, yet.
Comey friends have asserted that he memorialized a meeting during which President Trump pressured him into backing off of General Flynn. False, according to Comey, himself. Between the alleged pressuring, and revelations about the alleged memo, Comey was asked in a public hearing whether anyone had ever done any such thing. And he couldn't have been more definitive in his "no" answer.
More so, by all current reports, the quoting and paraphrasing of Trump was not a command. No head of an organization can be deprived of the freedom to express his opinion on any matter, let alone significant matters. Which is how all of Trump's alleged statements read.
There's more, but the point is made already. The Comey hearing will be rocky, with the usual grandstanding by Senators, and snarky aimed at the President. Not that Trump isn't deserving of some. And not that Thursday's hearing has any chance of making life any iota better for him.
Before the hearings are one hour old, if Comey hasn't yet skewered Trump, then he won't. I expect a "relief rally" to ensue. Comey is highly motivated, having been ridiculed by Trump, who publicly called him a showboat to Lester Holt, and allegedly called him a nut job to the Russians. While the entire situation wreaks, the entire setup wreaks of being oversold, and overly discounting worst-case scenarios, many of which seem unlikely to develop at all.
Rod David develops analytical techniques that are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He primarily analyzes S&Ps, generating several round-turn candidates daily. Rod publishes "Trading Plan" and more each session at the blog http://IfThenSignals.com.
To see other questions answered by experts click here.