U.S. stocks sold off on Thursday, with the S&P 500 recording its biggest daily percentage drop in three months as escalating worries about the Trump administration’s ability to push through its economic agenda rattled investors.
Investors appeared to be losing faith in the Trump administration’s ability to move forward with tax cuts and the rest of its domestic economic agenda, some strategists said. The latest cause for concern was speculation over the possible departure of National Economic Council Director Gary Cohn.
Real Reason Investors are Fearful
CNBC’s Art Cashin believes he knows the Real Reason Investors are Fearful.
The rumor that President Donald Trump’s chief economic advisor, Gary Cohn, would leave the administration, widely circulated before being denied by the White House, is not the only reason why stocks dropped as much as they did Thursday, Wall Street veteran Art Cashin told CNBC.
A cloud over the Trump administration’s image and ability to enact its agenda drove the Dow Jones industrial average to close down 1.2 percent, or 274.14 points to 21,750.73 on Thursday. The S&P 500 index declined 1.5 percent to 2.430.01 and the Nasdaq composite dropped 1.9 percent to 6,221.91.
“No disrespect to Mr. Cohn, but what’s really affecting the market is not the fear that only he would leave,” Cashin, UBS director of floor operations at the New York Stock Exchange, said Thursday on “Closing Bell.”
An unverified Twitter account, which has since been debunked by reporters and the administration itself, claimed on Thursday that Cohn was set to resign, Reuters reported. The White House released a statement later assuring that Cohn “intends to remain in his position.”
Cashin said Cohn’s departure could catalyze a “mass exodus” that would hurt many investors’ confidence in the Trump administration.
Hundreds of Reasons Stocks May Decline
There are hundreds of reasons stocks may have declined today, most of which we may only find about later.
Stocks may have declined for the simple reason valuations are insane or out of fear of Fed balance sheet normalization.
What about Unexpectedly Poor Industrial Production Numbers today, accidentally released a half houry early?
Literally, anything (or nothing at all), may be behind today’s decline.
Fear? What Fear?
Art Cahsin says investors are “fearful”. Let’s take a look.
Fear? It’s ridiculous to talk of this pissy selloff as an indication of fear.
Mike “Mish” Shedlock