White House officials and House Speaker Paul Ryan stated to Republicans that health care bill has been completed and that Donald Trump wants a vote this Friday. The outcome of this vote certainly means a volatile stock market in the short term.
Overall, the market has been relatively stable for the past few months with little volatility. The election in November brought an immediate decline in the market with the DOW down over 700 points in after-market trading but quickly recovered by the opening of the markets in the following day. The markets then took off with the Donald Trump rally.
32 Republican members of Congress have publicly opposed the health care bill. https://t.co/lN2SUPukJV
— NPR (@NPR) March 24, 2017
At least half of America trusts this businessman to know what he is doing. Supporters are hopeful Donald can make the decisions necessary to not only help out businesses in America, but the economy as a whole as well. He has promised everything from tax cuts to promote the growth of the nation to a health care system which carries less burden on the working middle class. It seems as though he still needs to convince some of his Republican counterparts in the House and Senate.
Earlier this week, the markets started to slump on the likelihood of a delay concerning the proposed tax cuts of Donald Trump. Could the market’s recent slump be due to a false hope? The potential new health care system will be the next test Donald Trump and the nation’s financial markets face. This test will likely bring uneasy volatility.
Investors in stocks and other financial markets are setting their focus on this postponed House vote to repeal the existing Obamacare. Many believe this event will set the stage for the next turn in the market.
Markets entered into the red towards the end of the day on Thursday, March 23, after House Republican leaders delayed the House vote. This vote had been planned later that day. The delay was due to President Donald Trump trying to gain traction and more support from conservative Republicans to pass the bill.
— ReadyForChange (@ProgPoli) March 24, 2017
The U.S. markets are likely to be in negative territory for the month of March. If this happens, this would be the first negative monthly return since October 2016. Though the vote on the proposed health care system may not directly affect the market, the result will affect the recent faith the market has placed in Donald Trump. This would cause trouble for matters that affect the financial markets more directly, such as personal and corporate tax cuts and infrastructure spending Donald has already promised.
Art Cashin, the UBS director of floor operation, told CNBC, “if they decide to postpone and not vote either tonight or whatever, [there’ll] be a mild sell-off because people say the votes still remain questionable. If they vote and have it voted down, there will be a more substantial sell-off.”
He also stated that if the vote passes, the market will rally on Friday.
Ted Weisberg was interviewed on NPR on Wednesday about his views of the current financial markets and how the vote on the health care bill will affect things moving forward. Ted is an active trader and is the founder of Seaport Securities. He stated,
“The risk is, of course, that it doesn’t happen. And I think what we saw yesterday was there was very real concern and, perhaps, valid – we won’t know till tomorrow – over the simple fact that maybe this health care reform was in trouble in the House.
“Now, we simply don’t know how that’s going to play out because we’ll have to wait till tomorrow. But the one thing the market does not like is the unknown. And if all of a sudden all these legislative initiatives come into question – you know, will they happen; won’t they happen – clearly, we’re ripe for a little bit of a sell off. And we kind of saw that yesterday.”
[Featured Image by Pool/Getty Images]