Let’s try this again.
On Thursday, House GOP leaders said they would not vote on their healthcare proposal to replace Obamacare, a decision that the Associated Press called a “stinging setback” for Paul Ryan and President Donald Trump.
When this bill, either as currently formulated or in a revised form, will head to the floor for a vote remains, at this point, unclear.
This news, while exciting in the political realm, jolted stocks a bit, but only if you really squint. Earlier on Thursday, markets were higher and the rush of negative headlines that crossed Thursday afternoon sent stocks steadily lower, but ultimately stocks finished slight lower but little changed.
Looking to the calendar for Friday, any movement on the healthcare bill will be closely followed, but we will get two pieces of economic data that markets will focus on: durable goods orders for February at 8:30 a.m. ET, and Markit flash manufacturing PMI at 9:45 a.m. ET.
When it comes to politics and markets mixing, no event in recent memory had a bigger impact than September 2008’s failed TARP vote.
In the wake of the Lehman Brothers bankruptcy, and with the global economy hanging by a thread, Congress failed to pass a bill that sought to get the global credit markets working again. This sent the Dow down about 7%. A few days later, a modified version of the bill was passed.
For those looking for massive, dislocating, heart-pounding market swings to follow from developments related to the American Health Care Act, the last few weeks have been a disappointment.
On Tuesday, we saw stocks have their worst day of the year ostensibly on fears related to a failure to pass healthcare legislation and a potential imperiling of the entire Trump economic agenda. At the time, however, some analysts said there were more technical factors underwriting that selling and, as the last couple days have transpired, it seems clear this was the more broadly correct explanation overall.
Certainly headline political risk is not completely absent from markets. But as we’ve seen time and again in the Trump era, markets and politics have gone their separate ways.
This theme doesn’t seem on the edge of changing.
And so while passing a healthcare bill has significantly lower economic stakes than the passage of TARP, the political stakes seem almost as high. Which is a great reminder that the oft-mentioned “political risk” in markets rarely exists to the extent you might fear. And even then, as the reactions to Brexit and Trump’s election showed investors, things might still go the other way.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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