Markets, Tax Cuts, a Tale of Two Cities… and Politico?

The hope of tax reform. It’s what I’ve been telling you, as well as telling readers of my Successful Investing newsletter, has been the key to this market rally since November 9, 2016.

That, of course, is the day after Donald Trump was elected president. And ever since then, markets have rocketed higher on the hope that President Trump and a Republican Congress could put in place key elements of the pro-growth economic agenda he told America he wanted to enact.

That agenda is comprised of regulatory rollback, Obamacare repeal-replace, tax reform that includes a reduction in the corporate tax rate and a foreign profit repatriation holiday. And while there has been regulatory rollback, there was no Obamacare repeal and replace.

Last week, the remaining leg of the pro-growth agenda — corporate tax cuts and a repatriation holiday — appeared to be in serious trouble.

The reason why had a lot to do with the reaction to President Trump’s stunning remarks regarding the deadly violence in Charlottesville, Virginia. Recall that last week, I mentioned that the president’s “both sides to blame” comments about the violence had alienated key members of his own party, and especially key members in Congress that he needs to help pass tax reform legislation.

Apparently, the comments also roiled the president’s key economic advisor, Gary Cohn.

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