Can Washington pull down Wall Street? These days the answer is yes, particularly going into the weekend. Hate him or like him, President Trump is creating a level of uncertainty that breeds selling on any run, given that there could be big newsflow on Saturday and Sunday and that's driving Friday's trading.
I say that because there was nothing wrong with JPMorgan (JPM) or Citigroup (C) , two big banks (and Action Alerts PLUS holdings, by the way) that went down on great earnings. Now it is true that both PNC (PNC) and Wells Fargo (WFC) gave you subpar numbers but it's the weekend jitters that's driving things, not business prospects.
Why is that? Because if there was just one bit of uncertainty emanating from the White House, the market could handle it. But consider this litany:
1. Will the president pull a "Saturday Night Massacre" and force out top people from the Justice Department if they won't fire Special Prosecutor Robert Mueller, thereby triggering a constitutional crisis
2. Will we launch missiles at Damascus and try to take out the leadership of the country after the Syrian government allegedly gassed its own people?
3. Will President Trump announce trade sanctions against the Chinese Saturday and then see trade sanctions against the U.S. posted Sunday night?
I said this week that trade bitterness isn't over; it's really just starting, so don't get all sanguine about it until Trump declares the issue over and the Chinese have suffered a beatdown, which is what he wants to administer.
4. Will former FBI Director James Comey be able to rattle the president with allegations of mob rule and dictatorship when he talks about his new book about working with the president before being summarily fired?
So, recognize that even the best of earnings -- and we have those with Citi and JPMorgan -- aren't enough to forestall an angry president, one who calls Comey an "untruthful slime ball" and is ready to fire missiles at any moment.