March 24 Wall Street's predilection for a
glass-half-full view of President Donald Trump was on full
display Friday as investors backed off fears that a failure to
repeal Obamacare would endanger Trump's entire agenda in favor
of optimism that he would simply get on with tax cuts and
As the clock ticked down to a close vote in the House of
Representatives set tentatively for Friday afternoon, U.S.
stocks were little changed even as it appeared that the
Republican leadership had yet to secure the support needed to
pass the measure.
That was in stark contrast with earlier in the week when
equities suffered their biggest one-day drop since the November
election on grounds that the shaky prospects for a successful
repeal of the Affordable Care Act - known popularly as Obamacare
- was a litmus test for everything championed by Trump.
"I think investors are of the belief that Trump is just
going to pivot to taxes," said Paul Nolte, portfolio manager at
Kingsview Asset Management in Chicago. "I think it's a pivot
from what we saw on Tuesday."
Indeed, Trump delivered lawmakers an ultimatum late
Thursday, saying the time for negotiation had ended and that he
was willing to leave the ACA in place and get on with his other
priorities. S&P E-mini futures rallied about
0.25 percent in overnight trading following the statement.
"If this goes on the back burner, and they start addressing
corporate tax rates or infrastructure, that would be a positive
for the market because the administration is not going to look
at this and say, 'Hey, this thing is going to take a while.'
They want to win," said Bucky Hellwig, senior vice president at
BB&T Wealth Management in Birmingham, Alabama.
"So they will go on to something that they could get through
more quickly, which will be beneficial to the market," Hellwig
U.S. stocks have rallied hard since Trump was elected on
Nov. 8, with the benchmark S&P 500 gaining around 10
percent in that span. Most of the gains have come as investors
embraced prospects for the pro-growth and pro-business agenda
Trump touted during his campaign.
But more recently, doubts have arisen over Trump's ability
to deliver on the agenda as the effort to repeal Obamacare grew
more rancorous. Stocks have drifted sideways for the last
Even amid the more sanguine mood on Friday as the vote
approached, not all investors were ready to embrace the notion
that a failure to repeal Obamacare could be so readily
overlooked given how far the market has come since the election.
"If the Republicans cannot settle their own
conservative-moderate division on healthcare then that divide
will be exacerbated for any other issue they attempt," said
Joseph Trevisani, chief market strategist at Worldwide Markets
in Woodcliff Lake, New Jersey.
Still, with less than about 90 minutes to go to the House
vote, there was little evidence of the angst evident earlier in
the week when investors saw the vote as a clear pass-fail test
for Trump's agenda.
"I think what Trump did by saying that they are going to
take a vote and if it doesn't go they will move on to the next
item is kind of a positive thing, because I think the more
important things are fiscal stimulus and tax reform," Tom Tucci,
head of Treasuries trading at CIBC in New York said.
"I know a lot of people are saying this will foreshadow the
battle there, but I think there’s a lot more support on that
(Reporting by Dion Rabouin, Karen Brettell, Caroline
Valetkevitch and Sinead Carew; Writing by Dan Burns; Editing by