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While there was plenty of news to chew on from fired FBI Director James Comey’s testimony to the Senate Intelligence Committee, it is clear that the investigation into alleged Russian influence on the 2016 election and the Trump campaign is far from over.
That means nothing good for Wall Street.
Issac Boltansky of political research firm Compass Point told Business Insider that the Comey hearing proved that nothing is going to be resolved anytime soon, delaying any hope for Wall Street friendly reforms like bank deregulation or sizeable tax cuts.
“The hearing was in line with expectations and the market appears to have shrugged it off for the time being,” Boltansky said in an email following the hearing. “From a markets perspective, my concern remains that this issue is beginning to dominate the Congressional bandwidth, which is a headwind for advancing the GOP’s pro-growth agenda.”
Chris Krueger of Cowen Washington Research Group agreed with the assessment that while the hearing did not reveal a lot of new information or change the investigation in any large way, it would put the legislative agenda on hold.
“Slows everything down,” Kruger told Business Insider. “The only thing moving on the Hill with any velocity, momentum, or bipartisanship is investigations.”
Kruger also said that while tax cuts, Wall Street’s favorite policy on Trump’s agenda, is on a “separate track” from the investigation, the Comey hearing and similar events “delays that engine.”
Investors have been anxiously awaiting tax cuts because they would drive down costs for corporations and likely lead to higher profits, thus higher stock prices.
“Can still get done, but Congress must clear health care and [the fiscal year 2018] budget sequentially and avoid a shutdown and a default due to the debt ceiling… just to get to tax on the table,” Kruger said in an email.