Heading into the close, the FTSE 100 is marginally lower, as investors await the outcome of political maneuverings in Washington.
- Trump plan in doubt
- Possible reversal in store?
- Heavyweight stocks fail to rally
All eyes are on Washington to see whether how President Trump fares in the first real test of his legislative program. Markets, having (perhaps a touch naively) assumed that the year would see him go from triumph to triumph, are now on the cusp of switching to the opposite extreme, fear that none of the goals of the administration will be achieved. A failure this weekend and no redeeming ‘tax-cut lite’ plan soon could see a lot of the premium wiped off equity markets. Still for now people appear to be giving him the benefit of the doubt, with small gains on Wall Street and European markets essentially in a holding pattern.
The problem for markets is that we remain in a news-light environment. Equity and economic news has not been of the real blockbuster variety, which leaves Washington-watching as the only game in town. While the broader S&P 500 is up slightly, it is telling that the top-weighted stocks on Wall Street are not moving higher. Breadth also remains weak, with the slight improvement in the number of risers versus fallers not helping to restore the bullish picture. The post-election rally is facing a death or glory moment.
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