(NationalSentinel) Stocks and Politics:Â Wall Street took a battering on Tuesday, with the Dow Jones off around 200 points – the worst day for markets in 2017 – an apparent reaction from investors who are now concerned key policy promises by then-candidate Donald J. Trump won’t come true after all.
Among them: Serious tax reform, with top rates coming down from 38 percent (the highest in the industrialized world) to Trump’s promised rates of between 15-20 percent.
For the first time since the election, markets are doubting they will get the pro-growth policies of tax reform and stimulus promised by PresidentÂ Donald TrumpÂ and the Republican Congress.
The repeal of Obamacare appears to have hit some snags and the GOP brought out Trump earlier Tuesday to serve as pitchman to House Republicans who may have been wavering ahead of Thursday’s vote. Whether he won votes or not is unclear, but markets certainly took the lack of clear majority support as a negative.
“I think it’s certainly interesting the market is questioning it, based on the limited amount of votes the Republicans can afford to lose in the House. It suggests if you thought this party would be voting as a block on the key agenda items, that might not be the case,” said Mark Cabana, head of U.S. short rate strategy at Bank of America Merrill Lynch. “It might be a lot more fractured party than many might have anticipated.”
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So in other words, this isn’tÂ Trump’s fault, it’s the fault of the Republican majority which, for some reason, still hasn’t figured out how to govern after spending so much time preparing to take the reins of power during the Obama years.
The markets are uber-sensitive to things like broken tax reform pledges, and it could just be that investors are nervous because of the GOP fracturing over the alleged Obamacare repeal-and-replace legislation pushed by the president and Republican leaders but opposed by a sizable plurality of the Republican caucus.
Or it could be that forward thinkers on Wall Street are seeing writing on the wall they don’t like.
Either way, it appears as though the Trump-induced honeymoon on Wall Street begun after his election victory is over. Let’s hope the president’s agenda…isn’t.