That’s a phrase reality TV star Donald Trump uttered with regularity during his run on The Apprentice.
Tuesday afternoon, it became a reality for FBI Director James Comey, setting off a political firestorm and generating fears it would roil markets on Wednesday.
While the politicos and the press are salivating, investors reacted with one giant YAWN. Just look at Wednesday’s response for stocks, Treasuries, the dollar, the VIX, and gold.
How the market digests new revelations in the days and weeks ahead would be speculative. For now, the market sees this as a political event, not an economic event—much like Syria, North Korea, and the just-concluded French election. Put another way, it’s noise.
What about tax and health care reform? Some are concerned this will derail the “Trump Agenda.”
While stocks soared amid expectations of business-friendly tax cuts, more recently, a strong Q1 earnings season, upbeat guidance, and stronger global growth have picked up the slack. Think of it as the passing of the baton.
Moreover, any cut in the corporate tax rate has not been factored into analyst earnings forecasts. It would be icing on the cake at this point.
Longer-term, it really is “the economy, stupid.” That’s a phrase made famous in the 1992 presidential campaign.
A quarter century later, it’s still relevant to investors.
