One bright spot in the early days of the Trump presidency was as surprisingly resilient stock market. While many analysts expressed concerns that Trump’s policies could have long term and serious negative consequences for the American economy, investors appeared willing to give Trump the benefit of the doubt.
Following the humiliating defeat of Trumpcare, it appears that this confidence is eroding – and fast. As reported by CBS News:
“Wall Street’s main indexes hit their lowest levels in six weeks on Monday after Republicans pulled a healthcare bill, raising questions about President Donald Trump’s ability to deliver on his ambitious economic agenda…With [its recent] decline, the Dow Jones Industrial Average is on track to record its longest losing streak in six years.”
Analyst Joshua Mahony explained the issues to the Associated Press as follows: “The problem for markets is two-fold, with the inability to pass the health care reforms meaning any tax cuts will be diminished, while markets are now left wondering whether the president’s lack of support in Congress will make his tax cuts hard to pass in any form.”
Said Peter Cardillo, chief market economist in New York: “’The markets around the globe are falling as a rethinking of the ‘Trump Trade’ begins to focus on reality. While we don’t expect a full-blown correction to commence at this time, we do see rising negative sentiment replacing the ‘Hope Trade’.’”