Stocks took a hit in its post Memorial Day session with the Dow dropping 391 points on heavy trade to close at 24,361. Banks fell the most while energy and natural resource related stocks held up well.
Global markets headed south after Italy failed to form a government over the weekend and is faced with having to hold another election. Along with this comes renewed fears of a banking crisis and possible exit from the EU. This would in turn affect economic growth in the Euro zone. The news sent the euro down hard against the US dollar. It is important to remember that this news is geopolitical in nature and does not, at this stage, affect the solid fundamentals in the US economy. In looking at the relative size of each county’s stock market according to the World Bank, the US stock market capitalization is currently over $32 trillion while Italy has a market cap of roughly $600 billion. We are in the “T” club while Italy is still in the “B” club. By the US markets falling 1.5% today it lost about as much as the entire market cap of Italy.
It was a good day for Kinder Morgan. Canadian Prime Minister Justin Trudeau’s gubment has stepped up and agreed to purchase the Kinder Morgan Trans mountain pipeline for $3.5 billion dollars. The pipeline expansion project is cited as the most crucial infrastructure project in Canada but opposition in BC has brought it to a standstill. The gurus are calling this a good price for Kinder Morgan Canada which said it will use the proceeds to invest in its other assets.
The Boy Scouts had a flag ceremony in Seattle at the GAR cemetery on Memorial Day. The GAR stands for “Grand Army of the Republic” and is filled with Union veterans from the Civil War who moved out to Seattle after hostilities ceased. The Scouts put out flags, cleaned grave markers and paid respects to those who have gone before us.