Everyone’s fears over valuation and low volatility came to a head yesterday as stocks imploded alongside increasingly intense allegations against Donald Trump. The Nasdaq fell almost 2.6%, while the Dow was down 373 points. Barron’s says this should serve as a wake up call to investors. Stocks have risen strongly on the back of expectations for tax and growth reform that has not even taken a definite shape, let alone been passed or enacted. Soft economic data, along with stocks, is moving downward, reversing previously held growth expectations. Treasury yields are also falling, a classic sign of slowing growth.
FINSUM: The path of markets may have fundamentally changed yesterday. Doubts about Trump’s ability to create change had been increasing, and on the back of the latest scandal, they are surging.