Typically, stocks have sold off on news viewed as threatening to the Trump presidency. But they often recover just as quickly when investors begin to contemplate that even in the event that Trump is somehow forced from office, his likely successor, Vice President Mike Pence, would probably pursue similar economic and regulatory policies without as much drama. Friday was no different as the market processed the Flynn news.
“If this is impacting the chance of the tax package not being passed, then I get a more prolonged and bigger market decline,” said Jim Paulsen, chief investment officer at the Leuthold Group. “However, beyond that, financial markets might believe that even more favorable legislation could be achieved under a more cohesive Republican Party that is simply not possible with Trump in office. Ultimately, a peaceful transition to Pence may be met favorably by the financial markets.”David Kotok, chief investment officer at Cumberland Advisors, said markets “would prefer a less belligerent and non-tweeting replacement for what we have experienced.”
Read the full article at POLITICO’s website: https://www.politico.com/story/2017/12/01/stock-market-down-today-michael-flynn-charges