Daily Market Color July 21, 2017Political Uncertainty Tempers US Financial Markets While Oil Tumbles with Increased OPEC Supply A cautious tone was present in US financial markets during the final trading session of the week as political uncertainty continues to weigh on investor sentiment. Capturing headlines was the unfolding situation with Special Counsel Robert Mueller, who two months ago was tasked with investigating the connection between the Donald Trump campaign and Russia. Mueller officially expanded his probe into the businesses and associates of Trump this week, directly ignoring requests made by the President on Wednesday not to do so. Since then, President Trump has made several changes to his legal team, generating speculation that he may try to find a course to have Mueller dismissed, which would in turn add an entirely new potential roadblock to the already difficult challenges the Trump administration has faced in getting its pro-growth policies implemented. Further drama was observed in Washington today when White House Press Secretary Sean Spicer unexpectedly resigned, frustrated by the hiring of Anthony Scaramucci as Trump’s new communications director. Spicer is the second notable resignation this week, following yesterday’s departure of Trump’s legal team spokesman, Mark Corallo. US Treasury prices rose on the day, with yields/swap rates currently down 1-3 bps across the curve. The yield on the 10-year note is poised to close the week near 2.23%, nearly 9 bps lower than where it started the week. All three major US stock indices are trading 0.2% lower for the session, putting the tech-heavy Nasdaq’s streak of ten consecutive winning days in jeopardy. Shares in the energy sector contributed to losses, following a near 3% drop in crude oil prices. Earlier today it was reported that OPEC’s crude stockpiles were at their highest levels of the year, pointing towards ineffectiveness in the current production cutting agreement and reigniting fears of a global supply glut. WTI crude futures fell to $45.70/barrel while Brent crude declined to $48/barrel, both roughly $1 lower on the week. Next week the Federal Open Market Committee will begin its two-day meeting on Tuesday. While fed fund futures put the odds for a rate hike at less than 5%, investors will be tuned in to the FOMC statement released Wednesday afternoon to gain insight into the Fed’s views on the inflation outlook and potential timing for the unwinding of its balance. Hope you have a great weekend.