Delay seen, again, on Trump growth agenda after Comey sacking | Touch Latest Local,World,Tech,Entertainment,Health,Sport News
21 April 2018 00:00:00 AM Breaking News

• POLITICS

Delay seen, again, on Trump growth agenda after Comey sacking

Trump administration and Congress rekindled optimism that they could soon make progress on a pro-growth agenda including tax cuts, the unexpected firing of the head of the FBI late Tuesday presented investors with a fresh reason to second-guess their confidence in the “Trump trade.”

At the least, financial market participants viewed President Donald Trump’s abrupt dismissal of FBI Director James Comey as an unwelcome distraction, while some fretted it could tie Washington in knots for months, potentially postponing already-delayed reforms.

The takeaway for the stock markets: don’t bet on any quick legislation around trade, the budget, healthcare or infrastructure.

“There is nothing good out of this for markets,” said Michael Purves, chief global strategist at Weeden & Co. “It will weigh on Trump’s ability to cut deals with Congress. It costs him negotiating leverage.”

Jack Ablin, Chief Investment Officer at BMO Private Bank, said, “on a medium-term basis, it does undermine the administration’s power to get things done.”

Trump’s election last November unleashed a powerful upswing in U.S. stock markets on the premise that he would cut taxes and regulation and usher through a major infrastructure spending package. The benchmark S&P 500 .SPXhas gained 12 percent since Election Day, while shares of tech stocks and smaller companies have performed even better.

Nagging concerns about Trump’s ability to get things done, along with some anxiety about stretched equity valuations, have combined to cap the rally, and stocks have done little since early March.

Around midday Wednesday, the S&P was near unchanged, as were other market benchmarks.

The administration recovered some credibility last week when the House of Representatives voted to repeal major portions of former President Barack Obama’s Affordable Care Act after failing to do so a month earlier. The simple achievement of advancing the healthcare bill to the Senate had been seen by investors as a signal that enacting tax cuts was doable, the big question was just how soon – this year or next.

“There’s a tremendous amount of hope baked into the market that Trump is going to be able to act, particularly on tax reform,” said Brad McMillan, Chief Investment Officer for Commonwealth Financial in Waltham, Massachusetts.

Edward Perkin, Chief Equity Investment Officer at Eaton Vance, said if the date to pass tax “is pushed out it’s not so much a problem, but if people question if it will ever happen, then that’s a problem.”

The degree to which this further alienates Democrats on Capitol Hill, especially in the Senate, was another concern given how narrow support has been so far for Trump’s agenda.

Sen. Dianne Feinstein, a senior Democratic lawmaker from California, was not optimistic that tensions between the parties would ease anytime soon.

“I had been hopeful that we could have a line of activity that’s going to bring a very divided country together,” Feinstein told Reuters Wednesday. “The problem out there is that people are so divided.”

Should the Comey episode weaken Trump’s bargaining ability with lawmakers, it may actually act as a catalyst for a tax bill, just one that might resemble congressional Republicans’ version more than Trump’s.

“An ongoing special investigation or shift in the balance of power could actually make Trump more eager to sign off” on the previously existing congressional tax plan, analysts at NatWest Markets said.

Of course, some had already adopted the view that Trump’s promised reforms were a distant hope, at best.

“Investors are realizing that the fiscal policy agenda is being pushed out farther on the horizon,” Michael Arone, Chief Investment Strategist at State Street Global Advisors (STT.N).

Recommended

Loading...

Related Posts

PDP injuring itself – Nwankwo

Awka—AFTER his victory at the Supreme Court, which last week declared him

Read More

Kano govt to renovate NYSC orientation camp

The Kano State Governor, Abdullahi Ganduje, said that his government has appro

Read More

Ambode: Devolution of Power key to solving Nigeria’s problems

…Urges Traditional Rulers To Support Fight Against Drug Abuse, Crime &nbs

Read More

Why I want to be Lagos Island LG chair – Ojora

Apparently disturbed by the lackluster developments in the Lagos Island local go

Read More

President Zuma survives ‘no confidence vote’ in ruling ANC

South Africa’s President Jacob Zuma, survived the recent no-confidence vo

Read More

Trump to decide whether to block Comey testimony White House adviser

U.S. President Donald Trump will decide whether to invoke his presidential power

Read More

Senate caucus applauds S’Court’s ruling on PDP leadership tussle

The Senate caucus of the Peoples Democratic Party in the national assembly has d

Read More

Katsina Governor Masari warns Nigerians against unguarded utterances

Katsina State Governor Aminu Bello Masari warned citizens to watch their utteran

Read More

Buhari absent at FEC meeting as Osinbajo presides

PoliticsBuhari absent at FEC meeting as Osinbajo presidesPresident Muhammadu Buh

Read More

Lawmaker accuses security personnel of sexually harassing innocent girls

A member of the House of Representatives, Abudulrahman Abubakar (Adamawa-APC), o

Read More

Also Read

80’s Teen Idols Who Still Rock Hollywood

Many teen stars peak when they’re young, but some craft Hollywood lives f

Read More

​Mobile trend report sees Nigeria maintain lead on internet penetration

Nigeria’s internet penetration rate continues its upward trajectory reach

Read More

Sagay blasts Saraki, Dogara, defends anti-graft campaign

Chairman of the Presidential Advisory Committee Against Corruption (PACAC), Pr

Read More

News and sports websites 'vulnerable to attack

News and sports websites have some of the lowest levels of security adoption, a

Read More

FG to extend whistleblower policy to illegal weapons

Following the success recorded through the Whistle Blower Policy as relates to l

Read More

Amazon Adds Show to Echo's Tell

Echo isn't just for sound anymore. Amazon on Tuesday announced Echo Show, a new

Read More

Just In: Authorized FOREX Dealers Unable To Subscribe To $100m Offered by CBN

The Central Bank of Nigeria (CBN) says authorized dealers were able to subscri

Read More

Why the next iPhone won't be delayed

LOS ANGELES — There's been some talk this year that the next iPhone is go

Read More

Turing partners with TCL for next smartphone

Turing Robotic Industries (TRI) partnered with TCL Communications to produce wha

Read More

Solid waste reform will boost Lagos economy

Lagos State commissioner for the environment, Babatunde Adejare, says the ongoin

Read More