Goldman Sachs isn’t holding out much hope for President Donald Trump’s much-touted and long-promised corporate-tax reform.
“We continue to believe a tax cut is slightly more likely than not, but our conviction is low, as there has been little progress to date,” Goldman analyst Alex Phillips wrote in a note, the New York post reported.
“If tangible progress has not been made by October, after these fiscal deadlines have passed, tax legislation will start to look less likely, in our view.”
Last week's White House turmoil raised more questions about the Trump administration's ability to implement its pro-growth agenda, Reuters reported.
Friday marked the first time stocks haven't risen the day after a more than 1 percent drop since Trump was elected president on Nov. 8.
The week's losses further dented the post-election rally, which was built on Trump's promises of tax cuts and higher infrastructure spending.
Thursday's 1.5-percent drop in the S&P 500 came a week after a similar fall, and while the benchmark index still is up 13.4 percent since the election, it is down 2.1 percent in the last two weeks. That's the most since the two weeks before the election.
"While this mini correction we're seeing may not amount to much, it's probably caused by this escalation in doubt of all of these things that seemed hopeful to investors at the beginning of the Trump administration," said J. Bryant Evan, investment advisor and portfolio manager at Cozad Asset Management, in Champaign, Illinois.
“Picking fights and getting criticized by members of one’s own party don’t help in pursuing one’s agenda,” Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a note to clients Friday, Bloomberg reported.
Meanwhile, after widespread criticism for remarks that appeared to confer legitimacy on white supremacists, Trump is facing a mass exodus of the CEOs he once courted, a public repudiation that undermines his image as a businessman and could threaten his policy agenda on everything from taxes to trade, Bloomberg reported.
Trump said Wednesday he’s disbanding two advisory groups of American business leaders, after several CEOs quit this week and more were preparing to resign in the wake of his comments that some “very fine people” were among neo-Nazis protesting at a violent rally in Charlottesville last weekend.
The week’s events threaten to forever tarnish Trump’s credentials as a business president, undermining a foundation of his political appeal and weakening the Republican party’s core alliance with business interests for as long as he leads the party. The political damage compounds the risk the GOP faces in 2018 midterm elections.
Corporate executives are now making a pragmatic calculation that a Republican president’s brand has become too toxic, said Carlos Gutierrez, chairman of Albright Stonebridge Group, a Washington international strategy firm that advises businesses.
(Newsmax wires services contributed to this report).
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