I get the distinct feeling that the post-Trump-elect market party has come to an end, at least for now. Markets ebb and flow and tend to move in short bursts. Traders will tell you there are typically only a small number of times during a given year where profits flow fast and furious. We’ve just experienced  one of those times.

Now it seems as all eyes have shifted focus to other matters, particularly the Italian referendum (vote) which will be held on December 4th. Let me give you a bit of the backstory.

Matteo Renzi, Italy’s Prime Minister is a bit of a rock star. He was Mayor of Florence at 34 and hopped over to lead the entire country as the youngest PM at age 39. Renzi makes a very good point that with almost 1,000 members of Parliament, Italy is stuck in a bureaucratic tug of war. So, to alleviate this he has initiated a referendum that calls for a cut of approximately 1/3 of these members. Keep in mind, the entire Congress in the US is made up of 535 elected men and women.

Here’s the rub. Renzi went out on a limb with this referendum saying that if it didn’t pass  he would resign. Even he admits this was a mistake but nonetheless he seems to be on the hook. Speculation abounds regarding what happens if a NO vote is cast and he does in fact resign since this would more than likely mandate an early election. A rising party called the Five-Star Movement has proposed an exit from the EU. Should Italians vote No, Renzi does in-fact resign, the Five-Star Movement takes power and a referendum takes place for an Italian Exit, well, we then have Brexit part deux. I know, there’s a lot of pieces to put together but this is what investors are  now thinking.

In addition to the Italian political nonsense we have OPEC trying to decide if in fact a cut in production is going to take place or not. It seems that the current meeting being held while I type isn’t going  all that well and oil is falling as a result. Keep in mind that despite the fact that so many have shifted their focus elsewhere, this little area is still key for our markets. If Oil were to begin to backslide once again, it would spell trouble for debt markets and financial companies that have enjoyed such a nice run of late.

So now we go through a period of digesting the moves we’ve just had and we wait patiently to see  how this all plays out. I suspect that we’ll see quite a bit of volatility between now and December 4th and you can bet that you’ll start hearing more and more about a possible Italian exit. Keep in mind all the moving parts from above and let us all remember that the media hasn’t been, let’s just say, all that  accurate with their predictions this year. Maybe we should all take deep breaths before we go jumping to conclusions.