Today has been an extremely stressful day for Washington and Wall Street. In anticipation to the results of Senate voting on the tax plan, as well reacting to former national security advisor Flynn turning the tables on the Trump administration, Wall Street has been jumpy.
While an investigation that is now being aided by Michael Flynn threatens the safety of the presidency, a vote on the tax plan could coast the Republicans into a long awaited victory. Senate leaders are desperately trying to come to a positive result on their tax cut plan, despite its reckless and ruthless nature. If they don’t pass this bill, Republicans are worried that they may lose to Democrats in January’s mid-term elections. Of course, it is noteworthy to observe that Alabama’s Republican Senate nominee is accused of child sexual assault – something that could, and frankly should, deeply harm the GOP anyway.
A poll taken today had just 34% approval of Trump’s performance as president. This makes him the least popular president in his first year, in polling history anyway.
In reaction to this political turmoil, Wall Street closed lower than expected at the start of the day. Benchmark S&P 500 .SPX was down by 1.6% after ABC News reported on Flynn admitting to lying to the FBI regarding Mueller’s investigations.
Then, Senate Republicans announced that they had enough votes to pass their tax cut plan. This steadied Wall Street nerves, who after the initial jolt deterred to their recent catch phrase: Buy the dip.
Wall Street has been waiting for progress on the tax bill very closely, as corporate tax cuts will spur its stocks even higher. A failure of tax cuts, however, would have lowered their stocks by 3-5%, only in the short term.
“This Flynn thing threw everything for a loop. We had that still against the backdrop of tax reform,” said J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago (Reuters).
It’s looking like these two cataclysmic events have cancelled each other out – at least where it concerns Wall Street. Where it concerns US citizens, and the presidency, as well as GOP’s hold on Congress, remains to be seen.
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