As noted previously, following the admission of Trump's former personal lawyer, Michael Cohen, that he violated campaign finance laws by paying $130,000 to Stormy Daniels at the "direction of a federal candidate... for (the) principal purpose of influencing (the) election", S&P500 futures slumped, dropping to session lows while the SPY ETF fell 0.3% to $285.38, down from $286.34 at the close.
Courtesy of Bloomberg, here are some kneejerk responses from traders in the aftermath of Cohen guilty plea:
- "Some folks are going to tie it back to Trump and the fact that he’s probably not walking as clean a line as they would like to see coming from the president,” said Gary Bradshaw, a portfolio manager at Hodges Capital Management in Dallas. “All these trials were going on during the day and the market was hitting new highs, so the market kind of ignored it. But after hours, when guilty verdicts come out, the market is looking at it differently."
- Matt Schreiber, president and chief investment strategist at WBI Investments: “It’s just uncertainty, that’s all it is. And at the same time there’s obviously been some trade deals, China is looking to come back to the bargaining table, so I don’t know that this isn’t just more of the same short-term effect that we’ve had in terms of bad news that we’ve had for 2 years now. I just don’t see this taking markets that much lower since it’s the same story and we haven’t gotten that much further. Yeah a couple guys have been found guilty of things that they did, but they still have to draw line to the big guy. Smoke and guns would cause markets to go down further, but until they have that, I don’t think you’re going to have downward velocity.”
- "People are not going to be dumping the stocks or panicking -- none of the stuff has hurt the market so far,” said Matt Maley, equity strategist at Miller Tabak. “I don’t think this is going to create a lot of fear that will cause people to sell, but it will definitely force people to step back and refrain from buying, at least short-term. Fewer buyers in a rather thin market can cause a further downside. The markets are near an all-time high, investors would need the time to assess whether this is the news that will help the markets to go down."