Senate Voting, Stock Market Reaction, and Oil Rises

The main event yesterday was the Senate vote on the infrastructure bill. Since it was a hard-won compromise between Democrats and Republicans, there was no particular doubt about its success (the result of voting 69 - "for", 30 - "against"). Another thing is that a budget bill in the amount of 3.5 trillion went to him. And here the Republicans were no longer so positively disposed, since they consider it populist.

Now the next in line is the House of Representatives. It would seem, the Democrats have complete control, but in fact, everything may not be so unambiguously a foregone conclusion, since the House Democrats want to tie their vote on the infrastructure bill to the budget bill. In general, everything is rather complicated and confusing and, probably, it makes no sense to delve into all the details, but it is easier to wait for the final facts and work with them.

The reaction of the financial markets looks more interesting against the background of this news. The dollar was growing, but it is supposed to grow against the background of comments from a number of FRB heads about the need to start curtailing the FRS quantitative easing program, as well as data on the US labor market.

The US stock market, it would seem, received another injection of positive in the form of planned fiscal stimuli and was supposed to renew historical highs. But the dynamics of US stock indices was mixed. The more traditional SP500 and DJI rose and hit all-time highs, but the high-tech Nasdak was down. Once again, hinting that he simply physically cannot grow. So, the time has come to sell.

Everything was pretty positive on the oil market. Although optimism is clearly premature. The number of new cases of diseases in China has reached the highest level in the past six months. Recall that last week it was the outbreak of the pandemic in China and the restrictive measures taken in connection with this that put pressure on oil and pushed it down. Now the situation has worsened, but oil is growing. It’s illogical. And if so, then we sell oil on an illogical growth.