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Health Care Vote and the Stock Market

What is happening with the new healthcare bill? Simply stated...it's complicated.

As I put my commentary to bed on Thursday night there was continued wrangling to get the bill passed in Congress. However the vote scheduled for Thursday is being delayed. That is typically a sign that they don't have enough votes to pass at this time. But it also tells you that the next time they set a date for a vote, then odds of passage are high.

Interestingly, the Trump team is wisely pivoting on the narrative. That being a failure to get it passed is not a statement of administration incompetence. Rather, it is about Democrats being obstructionists to improving a flawed healthcare program.

I don't point this out to start a political battle. Or to say who is right. Rather, the perception of what happens with this bill has ripple effects to the stock market. That is because, as stated in my last commentary, the prevailing narrative goes as follows:

If the Trump team can't get a victory on the repeal of Obamacare on Thursday, then the odds of success on also getting lower taxes and higher infrastructure spending are greatly diminished.

So if they successfully change the perception that failure is not on the administration, then it may not lead to concerns on their ability to pass pro-growth agenda and what that means for the market. Then again, they could just make some additional compromises to get the votes necessary to pass the bill.

Simply stated...it's complicated.

Best,

Steve Reitmeister

Executive Vice President, Zacks Investment Research

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