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The Next Chapter for the Stock Market

Many are calling this "The Art of the Healthcare Deal" as a way to describe the unorthodox negotiating tactics employed by the Trump administration. In essence, Trump said if they don't pass the deal Friday, then he is taking it off the table and moving on to other priorities.

So the market is supposed to tank on this news...right?

Nope. Because they changed the narrative. Instead of spending time on the much more divisive healthcare agenda, they are switching gears to tax reform. Not as if that is a piece of cake. However, most people like lower taxes. Even some Dems might get on board as their constituents would generally give it a thumbs up.

You should expect the market to react immediately to every new headline that comes out of Washington. It will be hard for stocks to go much lower than 2300 while the promise of pro-growth tax cuts linger in the air. Unfortunately it will also be hard to make new highs above 2400 until a new plan is voted into law.

So expect more range bound trading. Be sure to use dips to add more Zacks #1 Ranked stocks to your portfolio.

Best,

Steve Reitmeister

Executive Vice President, Zacks Investment Research

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