While US markets spent October in a panic, the labour market boomed. The Wall Street Journal has the story…

WASHINGTON—Strong hiring and low unemployment are delivering U.S. workers their best pay raises in nearly a decade.

Employers shook off a September slowdown to add 250,000 jobs to their payrolls in October, above monthly averages in recent years, the Labor Department said Friday. With unemployment holding at 3.7%, a 49-year low, and employers competing for scarce workers, wages increased 3.1% from a year earlier, the biggest year-over-year gain for average hourly earnings since 2009.

And what did stocks do on this brilliant news?

The Dow fell 0.43%, the S&P 500 lost 0.63%, while the all-important NASDAQ declined a hefty 1% on the day.


Why did the market react badly?

When the stock market responds to strong economic news with falls, it’s not a bullish sign, folks. It tells you the good news is largely priced in, and that it is, in fact, now bad news.


Because it means the Fed will continue raising rates.

My guess is that plenty of punters hoped that October’s plunge would see the Fed ease off on its rate hike plans. Hence the bounce you saw last week. But Friday’s strong employment numbers put paid to that notion.

On the plus side, strong employment data (despite being a lagging economic indicator) tells you that the US economy is still in robust health. And while I think the stock market has peaked and will head into a bear market in 2019, it’s not going down in a straight line. This rally may have more legs in it.

Which is just as well for Trump and the Republicans, with the mid-term elections coming up this week. Without hyperbole, these are perhaps the most important mid-terms in modern US history.

If the Democrats get the numbers in the House and the Senate, they will spend the next two years grinding the country to a halt in their attempts to oust Trump.

If, on the other hand, the Republicans hold power in both the Senate and the House, they will continue with their platform of putting nationalism before globalism. This will have massive implications on the global economy and global asset markets.

The smart money suggests that the Republicans will hold the Senate but lose the House. But I wouldn’t be surprised to see the Republicans hold onto both.

I say that because in the last few months I’ve started to follow US politics much more closely. Given the left wing hysteria about how evil Trump is, I thought that he must be doing something right.

When The New York TimesThe Washington Post, all the phony’s in Hollywood and all the brain dead ‘cultural elites’ spewing out of the world’s socialist universities have it in for Trump, you know there’s something going on below the surface. [openx slug=inpost]


Why the Democrats are cons

So I started doing some research. And like researching a stock, I went into it with no bias either way. I didn’t like Trump, and I didn’t hate him. I just wanted to work out what was really going on.

I started following the Trump/Russian collusion story. I soon realised this was a phoney story concocted by the Democrats, who had paid a firm called Fusion GPS to get dirt on Trump in the event he won the election.

It was an ‘insurance policy’.

I won’t go into all the details here. But let’s just say the ‘collusion’ was between the Democrats, the liberal media, and the FBI. Clearly, Trump’s campaign promise to ‘Drain the Swamp’ unnerved the establishment.

Meanwhile, Bob Mueller has been ‘investigating’ these Trump/Russia collusion claims for over a year…and has found nothing on Trump.

But then again, it wasn’t his job to find anything, because there was nothing to find. His job was to stretch things out to the mid-terms and hope the Dem’s win the Senate and take over the various investigative committees. Then a whole new round of investigations into Trump would start.

As you can see, I’ve gone down the rabbit hole of US politics. The turning point was the Brett Kavanaugh confirmation. This is where the Democrats completely lost the plot and showed themselves to be a party without ideas, and without conscience.

As you may recall, Kavanaugh had to endure multiple rape allegations just prior to the vote to admit him to the Supreme Court. Since then, two of the claims have been withdrawn.

The Democrats’ only weapon is identity politics, whether it be gender or race. Their aim is to divide, rather than unite. Their aim is to incite hatred, rather than common ground.

And because they are bereft of policy ideas, their only strategy is projection. That is, they project their own weaknesses and shortcomings onto Trump. That’s why Trump is called a racist, divisive and full of hatred by the liberal media.

But I think the American people are smart enough to see through this. They’re smart enough to see the con job that is the Democrats, and that they have no real plan for the future of the US.

Trump isn’t perfect, by any means. But he has ideas about how to ‘Make America Great Again’ and he’s putting those ideas into action.

That’s why I think the Republicans will do better than most people think. The elites simply cannot see, or accept, that ‘the people’ have rejected their views and plans for the world. It started with Brexit in June 2016 (which they’re still resisting) and was soon followed by Trump’s improbable victory in 2016.

My guess is that this trend will continue in the mid-terms this week. And it will have profound long-term implications for the world.


Greg Canavan