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The Dow and S&P are trudging toward ending with losses for the week, as “Trump to Comey: You’re fired!” remains the news story that keeps on giving.
The sad-sack retail sector is still getting attention as well. Fresh sales data and J.C. Penney’s results are hitting in the wake of Macy’s Monty Python-esque “We’re not dead” remark.
President Donald Trump is showing no signs that he will resign as the FBI firing controversy rages on, even if Democrats are dreaming of impeachment. Nonetheless, stock pundits are talking about how the market might react to such a move.
“What would U.S. stocks do if President Trump suddenly resigned? Based on recent price action, the answer is clear: Rally 3-5%, at least, over a day or two,” says Convergex’s Nick Colas for our call of the day.
“U.S. equities see through the headlines (like the Comey firing) and essentially believe two things,” the chief market strategist writes. “First, corporate earnings are growing nicely. Second, the Republican-led Congress needs to pass tax reform by the 2018 midterm elections.”
The market will “favor anyone who can push item #2 to a speedy conclusion while not screwing up #1,” Colas says. Another driver for stocks is long-term interest rates are going nowhere, he adds.