WASHINGTON, April 20, 2017 – The faltering Trump Rally has been in suspended animation for the better part of four to six weeks now, with only an occasional ray of sunshine piercing through the gloom of the aborted Obamacare repeal effort and the increasingly likely delay of greatly-desired U.S. tax reform measures. Wednesday’s gloomy stock market action reinforced the negative mood for most investors.
But what a difference a day makes. After a heavy cloud cover and intermittent rain yesterday here in our vast, mink-lined headquarters just outside Washington, D.C., the sun has come out in all its spring glory Thursday, bringing with it more summery temperatures and a more positive disposition—a brighter attitude that seems to be coloring today’s trading action on Wall Street.
Of course, a pair of early morning surprises from the nation’s capitol helped in this attitude adjustment; namely, word that an allegedly more-agreeable (to heretofore disgruntled House Republicans) Obamacare “repeal and replace” strategy might be back on the table when Congress returns from recess; rumors that Treasury Secretary Mnuchin might have some good words to say about progress toward real tax reform; and President Trump’s announcement that he was directing the Department of Commerce to open an investigation on foreign steel dumping (read “China”) and its potential influence on national security.
American Express’ (symbol: AXP) earlier blowout earnings report didn’t hurt either, goosing that company’s stock over 5 percent to the upside in heavy trading and helping offset recent weakness in the Dow Jones Industrial Average and in the banking sector itself.
As we near the 2 p.m. (ET) mark, the Dow is up an impressive 200 points (nearly 1 percent). The broader-based S&P 500 and the tech-heavy NASDAQ are both up by approximately the same percentage, indicating that a rising tide of comparatively good news, at least for today, can indeed lift all boats.
Imponderables still hang over the market. Crude oil took (WTI at least) took a roughly 5 percent hit to the downside yesterday and is marginally down today, continuing to erode confidence in the energy sector. And, lest we forget, the first phase of the French elections is about to unfold. This is causing many traders to worry that right-leaning, anti-Euro candidate Marine Le Pen might make it into the final runoff.
A win by Le Pen could raise fears of another nightmare scenario for Europe’s reigning socialist-globalist alliance, which was badly battered in 2016 by the Brexit win in the UK and by Donald Trump’s shocking (to the lefties) populist win in the U.S.
At this point, these worries don’t look to derail Thursday’s powerful rally. But second thoughts could trade Friday trading action, as many traders and investors may not want to hang around for those French election results.
Updates later, if warranted. But for now, let’s sit back and enjoy this unusual burst of bullish fun.