The market meandered all session long on Thursday as investors grappled with Hurricane Irma in the Atlantic, and the storm in Washington, D.C., which has put GOP leadership and certain factions on their heels. 

Hurricane Irma’s uncertain trajectory suggests it will land a direct hit on Florida with the greatest strength of any Atlantic hurricane on record.  The economic damage is something that can be assessed after the worst is over; for now, we continue to pray for the folks that have already been devastated and those potentially in its path.

There are all kinds of theories on the impact on the economy. Initially, it will be negative and exacerbate the construction worker shortage and any other current limitations on economic growth.

De Facto Null and Void

Meanwhile, Republican leadership is still smarting over the deal President Trump cut with Democrats to keep the government open by raising the debt ceiling. There is even talk of junking it altogether. I’m a fan of a debt ceiling, although it’s the biggest joke in the world. Even the world’s worst dieters have shown more restraint. The debt ceiling has been raised dozens of times, essentially nullifying the original intent.

Actually, I’m not surprised President Trump cut the deal; he hinted at such action several times. I’m still not sure why those nearest to the White House (whether it’s politicians or the media) seemed shocked with telegraphed actions. I hope this sparks a greater unity among Republicans. However, I still think the best bet for corporate tax will be 22% to 25%.

Not the Happiest Place Anymore

Yesterday, the Dow Jones Industrial Average stumbled to a 31-point loss and it could all be traced to a single stock- Disney (DIS).  The Mouse House, offering tepid guidance during an investor media conference, sending its shares through key support points and dragging its rivals along.

Still, the Dow and other major indices held at key support points yet again. It doesn’t feel as if the market is doing what it’s supposed to do at this stage of the rally –that’s to consolidate gains. 

Today’s Session

Hurricane Irma has been downgraded to a category 4 from category 5, but it will still hit Florida and perhaps other states hard according to most weather experts.  The market is looking to open lower, but I don’t think it’s because of Irma.  Instead, the lull that comes the week after the jobs report and lack of new economic data.

Speaking of economic data, because of recent releases, the Atlanta Fed now sees 3Q GDP under 3.0% and down from an initial assessment of 4.0%.  I read the data differently, although I would like to see stronger data in the second half of the year as momentum builds and feeds a virtuous cycle.