Trump trade is over as investors increasingly worry U.S. President is less likely get tax cuts and deregulation done, says Max Wolff of 55 Capital. Fred Katayama reports.
The Trump trade may be over. U.S. stocks plunged on Wednesday. The S&P fell 1.4 percent in morning trading after former FBI chief James Comey revealed U.S. President Donald Trump asked him to end a probe into former National Security Adviser Michael Flynn's ties with Russia. That came on the heels of Trump unexpectedly firing Comey and disclosing classified information to Russia about a planned Islamic State operation. Max Wolff of 55 Capital says all this news casts a shadow over Trump's pro business agenda. (SOUNDBITE) MAX WOLLF, MARKET STRATEGIST, 55 CAPITAL (ENGLISH) SAYING: "A significant part of what's produced the six month market rally is the notion that we're going to have radical deregulation particularly, but not exclusively, around financial issues, and we're going to have massive tax cuts, particularly, but not exclusively for large companies. The weaker the President is, the less likely you are to get those tax cuts and some of those premiums start coming out of the market. And, I think, that's what we're seeing right now." Bank stocks, which outperformed in the post-election rally, were the worst hit. The dollar index erased all the gains driven by Trump's pro-growth stance. And Wall Street's "fear gauge" - the volatility index or VIX - shot up.