20180306： the market and Cohns

indy

March 6th

Just when you thought it was safe to get back in the water, another shark hits the markets after hours. The S&P 500 did a nice job bouncing off the bottom of the zone we have been referencing since Friday for a close at 2,728 today.  However, after hours we had news Gary Cohn, the Trump administrations top economic advisor will be leaving.  Cohn was one of the more important figures that the markets wanted to stay in place for stability.

Cohns biggest contribution was already achieved with tax reform and has fallen out of favor with Trump in recent months. So in my opinion, the market knew this was coming for a long time and is not a shock.  The market speculated Cohn was going to leave after the Virginia shootings.  Then rumors and speculation started to swirl once again last week as Trump overrode Cohn’s opposition to tariffs. Then Trump early today even said he would expect Cohn to resign if he pushed forward with tariffs.  The markets knew this was coming.  This is why the S&P 500 futures aren’t down 100 handles tonight and only 37 as of 7:30 pm.  Granted it’s not pretty, but I think it was very expected within the last 48 hours if not since late last week.