The tyranny of a prince in an oligarchy is not so dangerous to the public welfare as the apathy of a citizen in a democracy.
— Montesquieu
The market has largely sloughed off the Israel-Hamas conflict.
In the four trading days since Hamas paraglided over the border into Israel and murdered 260 young people at a rave the S&P 500 is up nearly 3%.
Safe haven trades-like U.S. Treasuries and gold-which typically rise in price during geopolitical events, have barely budged.
We shouldn't be surprised really. The market hasn't paid much attention to the "government shutdown" that didn't happen, either.
Even though traders will quickly acknowledge the can has only been kicked to November 17, the market is acting like the next political battle in the House is an eternity away.
The House doesn't have a speaker yet? Congress can't decide on a response to an all-new heinous level of violence in the Middle East? "No worries," the market appears to be saying, "we don't need those politicians anyway."
The latest inflation numbers indicate the Fed can't declare victory in its war against inflation just yet? Who cares... Consumer inflation remains at 3.7%, core inflation above 4%.
The Fed minutes show they'll continue to keep rates higher for longer, and the bond market will keep hovering around 16-year lows?
Meh, nothin' to it.
According to CNBC, the chance the Fed will raise its benchmark rate another quarter point to 5.75% by the end of the year only skipped up a skosh.
How about "news" that 3rd quarter bankruptcies have put 2023 on pace to be the worst year for corporate America since 2010 at the height of the financial panic?
No reaction at all.
We'll have to wait until earnings season begins in earnest to see if traders get spooked. Tomorrow, JPMorgan, BlackRock and UnitedHealth Group are all slated to report earnings.
In the meantime, the so-called "Magnificent Seven" stocks-Apple (AAPL), Microsoft (MSFT), Google parent Alphabet (GOOGL), Amazon.com (AMZN), Meta Platforms (META), Tesla (TSLA), and new tech darling Nvidia (NVDA)-have lived up to their name and continue to buoy the S&P 500 higher.
Even shares of Walgreens hopped up 5% yesterday, despite facing a walkout of thousands of pharmacists and posting an earnings miss.
The only real big market news today was how underwhelming Birkenstocks IPO turned out to be... at least compared to Cava. Overall, the market seems to have adopted a "we don't want to buy expensive (and ugly) 'Lord Boards' but we don't mind overpriced quinoa bowls" level of apathy.
"Looking ahead," Forbes reminds us this morning, "the fourth quarter has historically been the best quarter of the year for the stock market. The S&P 500 has averaged a 4.2% gain during the fourth quarter going back to 1950."
Frankly, reading the financial news was a bit of a slog and annoying today.
At least the Wall Street Journal noticed the hypocrisy of students and faculty at Harvard in their response to the cross-border raid of Hamas.
"For nearly 100 years," write Alex Gutentag and Michael Shllenberger in the online newsletter Public, "the political Left prided itself on being the side of peace and anti-militarism. The Western left supported peace talks in the Middle East, backed a two-state solution to the Israel-Palestine conflict, and called for noncombatant lives to be spared." The continue in earnest:
But over the past week, loud voices on the radical Left endorsed Hamas' brutal and horrific terrorist attack on Israeli civilians. Several left-wing organizations released statements that appeared to condone the attack.
The day after Hamas killed 1,200 Israelis, the Democratic Socialists of America (DSA) held a protest "in solidarity with the Palestinian people and their right to resist 75 years of occupation and apartheid."
Thirty-four Harvard student organizations signed a joint statement excusing the murder and kidnapping of women and children. "The apartheid regime is the only one to blame," the statement read. "The coming days will require a firm stand against colonial retaliation."
Wrote Yale Law Professor Zareena Grewal on X/Twitter, after the attack, "Prayers for Palestinians. Israel is a murderous, genocidal settler state, and Palestinians have every right to resist through armed struggle, solidarity."
Leaders of Black Lives Matter (BLM) wrote that it stands "in solidarity with our Palestinian family" and called on people to "understand the resistance in Palestine as an attempt to tear down the gates of the world's largest open air prison." The Chicago BLM chapter posted a graphic stating, "I Stand With Palestine," along with a silhouette of a paraglider, referring to Hamas terrorists who had paraglided into a music festival and killed 260 young people.
Gutentag and Shellenberger go on to indict "privilege, coddling, and narcissism" for the public support of Hamas.
As you know, the focus of our own newsletter is meant to be about money and economics.
Some days, however, it's hard to keep that focus.
More and more, perhaps to our own detriment, we fear the social and political trends taking over our attention spans... crowding out the wonder of an otherwise mundane tool for prosperity like the stock market.
Maybe its wildness just lies in wait.
So it goes,
Addison Wiggin
P.S. "Thank you for our exchanges," our friend reader Basil O. writes in again, this time as if on cue. "Something very hard to do these days given all the battle lines that have been drawn.
"The 'tumult' in your inbox is there because of your courage in showing folks the nexus. Quite sure, their request is for you to just 'shut up and play yer guitar,' to borrow from the late, great man from Baltimore, Mr. Frank Zappa.
"That is, just tell us how, when to make some money and where to put it. But, truly, it would be a dereliction if you made no attempt to connect the dots re the gathering storm clouds and the well-being of our money.
"As to Ms. Kennedy-Townsend, all you need to know is that she lost her bid to become Governor in the overwhelmingly Democratic State of Maryland.
"Thanks. Basil"
Thank you, Mr. O. That's a much more constructive e-mail than the one we received in the middle of the night last night reading, simply: "Stop."
P.P.S. Please take a moment to watch The Great American Shell Game.
About the Author
Addison Wiggin is an American writer, publisher, and filmmaker. He has been covering the financial markets, the economy and politics for three decades. An acclaimed New York Times best-selling author, his books include: The Demise of the Dollar, just released in its 3rd Edition covering the dollar from the "bailouts to the pandemic and beyond. Mr. Wiggin is also the co-author, with Bill Bonner, of the best-sellers Financial Reckoning Day, Empire of Debt. He wrote The Little Book of the Shrinking Dollar in the Wiley Little Book series. Addison is also the writer and executive producer of the documentary I.O.U.S.A., an exposé on the national debt, shortlisted for an Academy Award in 2008. He lives in Baltimore, Maryland with his family. Addison started his latest project, The Wiggin Sessions, powered by The Essential Investor, in March 2020. He films from a homegrown studio in his basement.