Our Products Make Us Different, Our People Make Us Great

Weekly Market Commentary

10.14.19

As we discussed last week, President Trump’s abrupt decision to pull American troops out of Northern Syria has instigated near-instantaneous anarchy in the region while eliminating any remaining leverage the United States had retained in an eventual political settlement in the civil war. In the six days since Turkey’s invasion of Kurdish-held territory, hundreds of ISIS militants have escaped from prison and groups of Turkish-aligned militias are reported to have assassinated local politicians at the behest of their patrons. The Kurdish government, which had worked closely with US Special Forces for years in order to combat ISIS, has thrown its lot in with Syrian President Bashar al-Assad in efforts to seek protection from the Turkish invasion. In exchange for giving up strategic towns and oil assets, Assad is sending in thousands of Syrian troops to defend the territory against Turkish President Recep Erdogan’s efforts to clear his southern border of separatist-aligned Kurds.

Washington is in uproar over the situation’s rapid deterioration and its subsequent loss of influence, and President Trump has enacted sanctions against Turkish officials for their attacks on America’s former ally. Note, however, that sanctions would not have been necessary had POTUS not given the greenlight to Erdogan to invade, tacitly condoning the offensive action. It was reported today that Russia is sending its own troops to the border region between the warring factions, effectively replacing America’s role as conflict mediator. Meanwhile, Secretary of Defense Mark Esper announced over the weekend that the US would be forced to evacuate its remaining 1,000 troops stationed in the country, as the situation has become untenable after Turkish artillery struck targets less than half a kilometer from American positions. The move is symbolic of America’s diminished clout in the region and of the renouncement of its moral authority.

Elsewhere in Brexit-land, last minute negotiations are taking place between Brussels and Boris Johnson’s government. The latest reports indicate that the outlines of a draft agreement have been reached, with heavy emphasis on the future status of the Northern Ireland border. If no deal is reached by Friday, Johnson is required by law to ask for an extension. Although he has promised to uphold parliamentary edict, Johnson simultaneously vows the UK will leave the European Union by its self-imposed deadline of October 31st. Even if a deal is agreed upon, Parliament must provide assent in order for it to be legally binding, something Johnson’s predecessor, Theresa May, could not achieve and which eventually led to her resignation. The saga continues.

10/11/2019 Market Strikes

10 Year Treasury:

1.76

S&P 500:

2,970.27

FN 3.0:

101.188

FNCL 102:

2.701

Please Note: The above Market Commentary information is updated weekly.