Not even a week after the 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,