After gapping lower upon Sunday night’s open, stock indices are making an impressive charge back to the upside heading into the closing bell. While the mini Dow and mini S&P are still negative on the day, they are off their lows by 150 and 22 ticks, respectively. The mini Nasdaq and mini Russell are both in the green and also off the lows by a good margin. The initial move lower was not all that surprising considering the disappointing finish to last week. Not only did we not manage to pass a health care bill on Friday, the inability to gather the votes to amend/overhaul what is widely considered a flawed health care system casts doubts over President Trump’s ability to pass meaningful legislation moving forward. He has stated that tax cuts would be up next on the agenda. With this setback, it is easy to see why many have lost confidence in meaningful tax reform(s) in the near future.
President Trump did however sign four bills today that would roll back some Obama era regulations. The regulations are related to teachers, federal contractors, and land management. It will be interesting to see how these bills do once they get to Congress. I would expect to hear some more news on the prospect of their passage very soon, but I’m in the camp that says new developments (or lack thereof) on health care and taxes will have a greater influence on where these markets go next.