Market Morning: Democrats Subpoena, May & Auto Sales Soften, Boeing Woeing, China Talks
Democrats to Vote to Subpoena Mueller Report
“We need that report turned over. Look at every prior case of independent counsel and special counsel, they’ve turned over the entire report within a day or two,” said Representative Jamie Raskin, a House Judiciary Democrat. “What’s taking place here is a sharp break from precedent.” Democrats are desperate to get their hands on the full, unredacted Mueller Report, now nicknamed the “Fueller Report”, thinking that maybe there are still skeletons in that closet that they can dig up that would prove, once and for all, that Donald Trump is really the reincarnation of Stalin and that he’s a Russian spy. The report as redacted reads “Donald Trump is,” and then there is a long black line about 10 letters long that ends in a “y”. This is a joke. Back to non jokes, the House Judiciary Committee is expected to vote on party lines, Democrats voting to subpoena and Republicans voting to block. The Justice Department is expected to ignore the subpoena and be held in contempt of Congress, which is then expected to fight for release of the full report in the courts.
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May Goes Soft on Brexit?
In a significant shift, reports The Guardian, British still somehow Prime Minister Theresa May said she would request an extension to leaving the European Union and opened the door to accepting a softer Brexit, not ruling out accepting either a customs union or a second referendum. In a secretive cabinet meeting last night, it was suggested that May has rejected a cabinet majority that said they would prefer a no-deal Brexit to an extension of Article 50, and if this is indeed the case, then turning to Labour on a customs union and softer Brexit would probably stoke a rebellion that could topple her government and lead to fresh elections. Really though, all that would have to be done in order to ensure a no-deal Brexit would be fresh elections, since they would have to be held after the United Kingdom is now scheduled to leave the European Union, which is now April 12. (NYSEARCA:EWU)
Auto Sales Going Soft, Too
Sales at General Motors (NYSE:GM) in the three months through March fell 7 percent year-over-year to 665,840 vehicles. The decline was partially offset by higher prices, which were on average $8,040 higher in the quarter, the “best ever” for the GM, reports Fox Business. This smells like lower economic activity plus a bit of inflation. Auto sales might yet pick up in the second quarter thanks to lower interest rates recently that should start to trickle through in the coming months. Fiat (NYSE:FCAU) did especially badly, with sales down 45% for the quarter. The stock was up 1.2% yesterday but will probably fall on those numbers in today’s trading. On top of this, President Trump is threatening to completely close the US Mexico border, which could shut down the US auto industry in a week, says the Center for Automotive Research.
More Boeing Woes
The Lion Air Boeing (NYSE:BA) 737 MAX crash was linked to a faulty sensor that was apparently repaired at a US aircraft maintenance center just before the tragedy. Which means either there’s a problem at the facility or the sensor had nothing to do with the crash. The center is in Florida, called XTRA Aerospace Inc. in Miramar, and was tasked with repairing the “angle of attack” sensor. The sensor was apparently activating the anti-stall system that pushed the nose of the plane down repeatedly, eventually leading to the crash of the plane. Angle-of-attack sensors are a wind vane on the side of a jet designed to show how air is flowing relative to nose angle. In the case of the Lion Air flights, the left-side sensor was showing the nose pointed about 20 degrees higher than was actually the case.
Chinese Vice Premier Liu In Washington for Trade Talks
Another shot at ending the trade war. Last week Chinese Vice Premier Liu met with Treasury Secretary Steve Mnuchin and Trade Czar Robert Lighthizer, and this week he’s coming to Washington to continue discussions. Futures are up on optimism surrounding the talks with the Nasdaq (NASDAQ:QQQ) leading, up 0.6% in the premarket so far, getting close to all time highs. Despite reported progress though, there is no agreement as to an enforcement mechanism that would keep all the stuff on paper relevant, which is probably going to be a serious sticking point because it will be interpreted as punishment.
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