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Mike Flynn's Involvement With Russian Sources

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Whether or not President Trump actually asked former FBI Director to end an investigation into ex-National Security Adviser Mike Flynn’s involvement with Russian sources regarding U.S. policy, the fact that this is the center of many discussions this morning — even those usually reserved for activity in and around Wall Street alone — may create a dampening effect on the market today. As they say, the market hates uncertainty

Thus far, controversies that have persistently swirled around the White House since even before Trump took up residence there have been largely ignored by market participants; economic reads have been strong enough to withstand these jolts from Washington DC. Growth, jobs, an improving global picture and even the normalizing of interest rates from the Federal Reserve have all contributed to strength in the domestic economy (a few inconvenient reads like 0.7% GDP growth in Q1 notwithstanding) to a notable extent.

HOWEVER, if there truly is obstruction of justice happening at the White House and not just a partisan witch-hunt, this should be enough to shake the core of bullish market activity going forward. Nothing else currently — with major monthly econ reads and most of Q1 earnings season now in the rearview — has the capacity to change the direction of this long bull market more decisively. Political partisanship aside, this appears to be something the market is no longer fully ignoring. For today’s pre-market, the S&P 500 is -15 points, the Dow -132 and the Nasdaq -35.75.

A little sunlight on these matters should go a long way. But if vital aspects of these questions stay murky, expect market activity to demonstrate growing discomfort ahead.

Earnings Season, Final Leg

Ahead of today’s opening bell, Target (TGT - Free Report)  reported a healthy earnings beat on both top and bottom lines: $1.21 per share topped the 89 cents expected, and $16.02 billion in quarterly sales easily bettered the $15.64 billion estimated. That said, revenue growth is down 1.1% year over year, with comps down 1.3% — suggesting this big-box department store is facing the same industry headwinds as others in the Retail space. But TGT shares are trading up 7% following the report.

After Tuesday’s closing bell, Urban Outfitters (URBN - Free Report)  missed earnings expectations by 3 cents per share to 13 cents, and revenues reached $761 million, below the $772 million in the Zacks consensus. For a more detailed report, Maddy Johnson released this article after the market closed yesterday: Urban Outfitters Misses on Q1 Earnings


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