Economy •

President Trump Unveils New Plan to Privatize US Air Traffic Control

June 9, 2017 By Bill Leave a Comment

On Monday, President Donald Trump revealed a new plan to privatize air traffic control systems in the United States. During a White House speech, Trump supported a plan to replace what he called an “antiquated” air traffic control system that was in desperate need of modernization. The move is part of a $1 trillion plan by the president to fix and update the country’s infrastructure.

Appearing before much applause at the White House, Trump was introduced as a builder before he backed the privatization of air traffic control. The operations will now be controlled by a non-profit corporation, which Trump claims will welcome in a new era in aviation for America.

Democrats were predictably unhappy about Trump’s move, suggesting that the move will result in fewer jobs in rural areas, while financiers will later profit from toll payments. The president put rumors to rest that this was an effort to benefit big business, however. Trump railed against the efforts previously made by the Federal Aviation Administration to improve the performance of air traffic control. Trump said that despite spending billions in taxpayer’s money, there have been numerous delays, and passengers have been burdened with an antiquated and broken system.

Breaking the Autocue

Going off script, Trump also attacked former president Barack Obama’s record, explaining how his administration had spent more than $7 billion in an attempt to fix and update the system, but had totally failed. He said that Obama’s administration didn’t know that they were doing, and had simply wasted money.

Long Overdue Improvements

Some analysts have struggled to understand why Trump would choose the aviation industry as his first stop during his infrastructure policies, given that there has not been a fatal airline crash in the United States for over eight years. However, it is also an easier option for the Trump administration to start with, given a previous bill has already outlined the groundwork for reform. The bill was created by Bill Shuster, the chairman of the House Transportation and Infrastructure Committee, and it outlines much of the new policies being announced by the Trump administration.

His White House speech drew a large audience, and he was joined by his daughter Ivanka Trump, as well as her husband, Jared Kushner. Trump explained that the reform was long overdue, given that the air traffic control operations were developed at a time when only 100,000 people flew every year. Today, there are almost 1 billion people traveling in the United States every year, meaning that something has to give. The current system, according to Trump, is incapable of keeping up. He claimed that the inefficiency of air traffic control is the reason why there are so many flight delays and other areas of inefficiency that he believes costs the national economy as much as $25 billion every year.

The president went on to say that while all passengers have access to GPS on their smart phones, the air traffic control system still relies on ground-based radio networks, as well as radar – along with communications equipment that isn’t even made any more. Trump even claimed that some operations are using paper to keep track of the thousands of planes that are flying at any given moment.

Under his new plan, the FAA would begin focusing on safety, whereas a non-profit organization would make sure that planes run on time. The new organization will not work on government money, meaning that the cost of flights could potentially go down, as passengers will have to pay less in tax.

What Will the Feds Do Next for Rates?

June 1, 2017 By Bill Leave a Comment

More than consumers are curious about the rate hikes. Even the Federal Reserve seems unsure what the next rate hike holds – only that one is coming.

The job market is looking promising for the United States, but inflation remains a significant concern. Federal Reserve officials, according to minutes of their meeting in May, are looking at raising the interest rates in June. The minutes were released on Wednesday, May 24.

So, naturally, Federal Reserve officials would raise the rates this June. What comes next, however, is not as clear.

Is the Economic Slowdown Giving the Fed Cold Feet?

Policymakers for the Federal Reserve might stop the raise in June until they know the slowdown is temporary. While they all state a raise is coming, June might no longer be the hard date for an increase.

During the May 2 and 3 meetings, all policymakers present said they were for winding down the massive holdings of the Treasury Department and mortgage-backed securities, reports Reuters.

If the economy continues to rebound from the first quarter weakness, the Federal Reserve is likely to go forward with the rate increase.

Central bankers are waiting for evidence of a slowdown in growth and reassurance inflation is hot before increasing. However, if the data comes as policymakers expect, rates could rise during the June 13 and 14 policy meeting. The market anticipates an increase, so it is unlikely it would jolt the market.

In the minutes, the Fed says they might reduce their $4.5 trillion balance sheet full of Treasury and mortgage-backed securities from the recession. Most central bankers prefer a plan that allows the balance to accumulate and mature gradually. However, the Fed continues to reinvest the funds every quarter.

A Divide Over Inflation

The minutes indicate a rate increase, but they also show a gap among Federal Reserve policymakers. Some policymakers feel inflation is not as hot as others do. Right now, the Fed is working on a theory that correlates with inflation and unemployment rates. These ideas present in their models, but there is no correlation providing the theory correct.

The increase, if it goes through, remains around the expected 2 percent range, especially as the labor market and economy continue improvements.

In response to the Fed minutes, stocks jumped. The Standard & Poor’s 500-index closed at record highs, while the Dow Jones averaged 21,000. Since President Trump’s inauguration, the markets have ebbed and flowed, with investors wary about policies and budgets coming out.

Despite the claims of a Trump administration tie to Russia, investors push ahead.

Participants of the Fed’s Open Market Committee equally agree a raise is necessary to level the markets after keeping them low to help stabilize the economy after the recession.

Not all Fed members agree. Some warn that increases might have an adverse effect. They refer to the weaknesses in the United States economy seen in the first quarter. These weaker numbers make some investors think the possibility of a raise in June is unlikely.

The unemployment rate has declined, but wage increases not equally so. In fact, salary increases report as sluggish, and the US gross domestic product (GDP) expanded at a mere 0.7 percent for the first quarter in 2017. A revised estimate from the Commerce Department comes this week.

A Quick Review on the Fed’s Job

The Federal Reserve plays a balancing act. They must restrain excess inflation in the U.S. economy, but also promote a healthy labor market. Federal Reserve members gauge inflation without looking at energy or food in the market. The inflation targets have been lower than anticipated, which might indicate the country’s economy still has growth before it is appropriate for another rate increase.

US and China Strike Deal in First Round of Trade Talks

May 17, 2017 By Bill Leave a Comment

The U.S. and China have struck a trade deal in the first round of talks.

The deal comes mid-July, and enables U.S. firms to expand their business in the chicken and beef markets – along with a few other financial arrangements designed to cut trade deficits with Beijing, reports the Huffington Post.

The deals came from the first 100 days of trade negotiations between the two countries. While the meeting seemed friendly, no one knew about the intensity of the talks until now.

U.S. Commerce Secretary Wilbur Ross states that the trades will bring down deficits. Currently, the United States carries an astounding $347 billion trade deficit with China from 2016. By July 16^th, China agrees to issue trade guidelines that allow United States card payment service companies to start licensing in China’s Union Pay market.

Too Little Gained?

China’s deal with the United States benefits beef producers and financial firms by providing them access to the international market, but in return, the benefits for the United States are not as appealing as some think. While it is an excellent start to trade talks, Beijing did not sacrifice much in the deal.

The deal comes from a 100-day plan, and American companies like MasterCard and Visa now have access to the Chinese market, reports the NY Times. Two financial institutions will receive bond underwriting, too.

While some say Beijing came out the winner, others believe that the deal was enough to get trade talks moving in the right direction. The U.S. needed concrete goals for trade talks, and this was one where everyone benefited. In addition, the likelihood of Beijing agreeing to this particular deal was high.

Will It Reduce the Deficit by Much?

The deal is a great start, but some say it will not do much to reduce the trade deficit with China. The gaps have widened since March of this year, and American-based companies might struggle to stay competitive with Chinese markets. China has already leapfrogged electronic payment services compared to the U.S., so United States-based companies may need to alter business methods if they want to succeed.

Stock Markets Respond to Trade Deal

After the announcement, Chicago Mercantile Exchange live cattle futures increased by 2%. The gains are in the hopes that China might boost imports of United States beef.

Feeder cattle features bumped by 3%, which increased the daily trade limits of 4,500 cents and a significant rebound from the previous quarter, reports Reuters. The market needed a significant upturn, and the trade deal announcement might be the answer to an already struggling trade market.

The demand for cattle futures is robust, and the cattle slaughter rate stays ahead of wholesale beef costs by 5.8 percent – the highest numbers since 2015.

Lean hog futures are also up, but they are not as prominent as beef and cattle futures.

American Beef is an International Competitor

While it is a small start in the right direction, beef is competitive to the global market. In fact, American beef is a premium product, while chicken is a complimentary trade offered by China. Chinese consumers prefer dark meat; therefore, they are more than willing to export the white chicken meat to the United States – where consumers prefer white meat over dark.

Chinese chicken imported into the U.S. might raise food safety concerns, due to a lack of consistency with raising and slaughtering practices in Beijing.

While Trump rallied against China, his softer stance toward Beijing indicates personal growth in the Trump administration. President Trump is embracing his diplomatic responsibility to strike favorable trade deals with ally countries to promote economic growth in the U.S.

U.S. Unemployment Hits a 10-Year Low

May 8, 2017 By Bill Leave a Comment

The numbers are in for the month of April, and it is good news for the Trump administration.

The NY Times reports job growth recovered in April 2017 from the weak reports published in March. Furthermore, an additional 211,000 jobs flooded the market, which rose the three-month average to 174,000.

The unemployment rate is now at 4.4%, which is down from the 4.5% in March. That rate is the lowest unemployment has been in the United States in over a decade.

Hourly Wages Increase, Too

While the number of jobs flooding the market is impressive enough, it was also found that the average hourly wage rose 0.3% from the month before and 2.5% from the previous year.

Furthermore, the wider unemployment rate dropped from 8.9% to 8.6%. This proves that the labor market in the United States is promising. However, it also means that the Federal Reserve is likely to keep increasing rates to keep up — and keep money flowing.

The Federal Reserve delayed the 2016 interest rates in hopes that the U-6 rate would decrease. Now that the rate has decreased, the Federal Reserve is likely to take advantage.

The report is a promising snapshot of the American job market. The United States job market continues to expand, even after the 79 straight months of employment gains, reports the Washington Post. This is an indication that the damage from the recession is slowly starting to recede.

What Industries Received the Biggest Growth?

Jobs were added in mining and manufacturing, and these areas have been closely watched due to the Trump administration’s promises that they will increase employment in these very industries. However, the majority of the job growth came from larger industries, like hospitality, education, health, business services, and leisure.

People are now actively looking for work and finding it, from what the report indicates.

Also, the measure that looks at individuals who have given up looking for a job is decreasing, which means people are active in the job market and succeeding. The steady increase in job creation offers American workers regular paychecks and the option for income once again.

The Issue of Buying versus Building Skills Continues

One reason for the slow growth is that employers must decide if they want to buy the skills of an experienced worker or build those skills. Both cost the firm, but the company must decide what is feasible financially overall.

Also, the pressure on wages indicates that more companies are buying skills instead of building them — because it naturally costs more to hire someone with the skills already in place.

The momentum in the job market is still impressive, and experts agree that it is likely to keep moving upward — despite the March report.

Where Do Trump’s Plans Fit into This?

President Trump made a promise that he would work to increase the number of jobs in the United States. So far, his plan is working.

Also, Trump threatened companies with pay enormous tariffs if they hire from overseas or move operations overseas. This has seemed to deter such companies from doing so. While nothing official is in place, more United States companies are likely to add jobs to the market.

Donald Trump also planned to increase wages for American workers, but not necessarily increase the minimum wage. Trump’s goal is to boost the economy from within, which allows companies greater options to expand hiring practices and salaries of existing employees.

Indian Outsourcing Firm to Hire 10,000 Workers

May 6, 2017 By Bill Leave a Comment

Trump’s ongoing criticism of companies hiring overseas has benefited the United States once again.

India’s Infosys Ltd. now plans to hire 10,000 United States workers over the next 24 months, reports Bloomberg. Their announcement comes after the Trump administration criticized the company for unfairly removing jobs from the United States.

As an India-based IT services firm, Infosys plans to start hiring at their Indiana location by August. The move comes after Infosys and other Indian companies, like Tata Consultancy Services, became political targets by the Trump administration.

With the pressures put on the United States companies to hire within the country, and the threat of penalties later for hiring outside of the U.S., more companies are stopping their outsourcing overseas.

Furthermore, IT firms like Infosys rely on the H1-B visa program — something Trump plans to review and change.

In April, the Justice Department warned employers about their use of this special visa program, stating that companies cannot discriminate against U.S. workers. Also, the Citizenship and Immigration Services agency issued a memo regarding proposed measures that combat the fraud and abuse of the H1-B visa program. USCIS further stated that there is widespread abuse of the visa program, and federal agencies need to find ways to mitigate such.

US-Based Hubs to Come to the United States

While Infosys has U.S. locations, their home base rests in Bangalore. However, they announced that four United States hubs would open, starting with the site in Indiana. The site in Indiana will create 2,000 jobs by 2021, says their Chief Executive, Vishal Sikka.

During the statement, Sikka says that his company realizes the need to be local. They also realize that customers should trust the outsourcing services, which is why they need a larger presence in the U.S. However, to offer a mix of global and local talent, the company must outsource overseas still.

The Washington Post reports that Infosys wants a tight-knit culture, and they want to hire and train employees who come from local universities. As of now, the company has yet to announce the three other United States sites and how many jobs they will create in each location.

The Increasing Criticism of Outsourcing Firms

Outsourcing companies had received criticism from Donald Trump long before he was president. However, now that he is the president, he has made it clear that he does not tolerate companies taking away jobs from Americans.

Outsourcing firms like Infosys rampantly use the visa program to bring out-of-country workers into the United States. However, Trump’s forceful “America First” campaign is making these companies to think in the opposite direction. After all, these visas are reserved for highly skilled foreign workers, but Infosys and other outsourcing firms have used them to depress wages in the area and reduce American jobs.

In fact, some of these service companies are barely paying the foreign workers enough to meet the minimum wage requirement of that visa, which is $60,000 per year. Many of them are paid well below the tech sector average for their work, too.

United States workers would increase costs for these outsourcing firms, but employing more Americans and reducing the unemployment rate would be beneficial for the U.S. economy.

In March, Trump promised that he would work to protect American workers, and he signed an executive order to overhaul the visa program that allows experts to come in from another country — especially when qualified American workers are ready and willing to do the job.

Indiana’s governor praised the announcement and called it a game-changing historical move by the company and for the country.

Democrats Ready to Oppose Spending Bill for Health Act

May 2, 2017 By Bill Leave a Comment

Democrats and Republicans are butting heads once again.

This time, Democrats threaten the new spending bill, and state they plan to withhold support for a stopgap bill if Republicans move forward with their plans to repeal and replace the Affordable Care Act reports The New York Times.

Threats of a Government Shutdown Take Center Stage

The past few years have seen more threats of government shutdown than any time before. Now, Democrats are threatening the shutdown over the weekend, because House Republicans need their support to pass spending measures.

Democrats are leveling the playing field, pitting the replacement of the ACA against the spending plan. Friday, April 28^th, marks the deadline for the measure of expenditure to keep federal doors open. And the short-term spending plan offered up by Republicans extends the deadline until May 5^th to finalize or create yet another stopgap.

Here’s the catch: the measure must receive approval from the Senate and House.

Democrats are not too willing to oblige.

Democrats Speak Out Against “TrumpCare”

The replacement option for the ACA has been coined “TrumpCare,” and Democrats made it clear that if Republicans move forward, they will oppose the Continuing Resolution for spending, says CNN.

Many thought the battle for spending was over, especially with the push of funding Trump’s border wall shoved off to the side. Apparently, Democrats are not done turning things in their favor. Now they want President Trump’s administration to pay for subsidies for low-income earners as part of the deal for the ACA.

The House Rules Committee responded with a rule that lets leaders bring legislation ideas up between now and Saturday the 29^th. However, no votes have been scheduled despite the freedom.

House Speaker Ryan, despite the news about the Democratic opposition, feels hopeful that the government will stay open – as it has in the past. Republicans are calling Democrats’ bluff, stating that they would be shocked if Democrats truly went ahead with a government shutdown.

The House Speaker made it clear that Democrats have a lack of alternative deals, and they are dragging their feet to avoid admitting such.

Fiscal Year Coming to an End at a Rapid Pace

Trump’s first year in office is spinning by, and lawmakers are aware of that. After all, their fiscal year ends on September 30^th. At that time, the House and Senate need a spending package that funds the government.

Representative Steny H. Hoyer of Maryland states that if the Republicans announce plans to bring their revised bill to the floor on the 28^th or 29^th as part of the open-season rule, Democrats will oppose the short-term measures for spending.

Hoyer says that Republicans are trying to force bills through the House before members can listen to American people and examine opposition.

Speaker Paul Ryan insists that they are making progress on the healthcare reform and that a long-term spending deal would be found before the deadline.

Trump’s New Tax Reform Met with Heavy Scrutiny

May 1, 2017 By Rebecca McGhee Leave a Comment

As promised, President Trump released his proposed tax reform. Moreover, as expected, it was met with scrutiny and animosity.

The dramatic overhaul of the United States tax code specifically calls for lower tax rates for corporations, tax cuts for individuals, and the elimination of tax brackets.

One-Page Outline Sparks Outrage

The proposed tax reform consists of a one-page outline, for now.

So far, the key details of how this plan will work have not been released – some say not even planned. However, this is the White House’s initial offer to Congress, and Trump’s way to boost economic growth.

Corporate taxes are expected to drop to just 15% – if his proposal is accepted. Some speculate this will generate loss of revenue for the country rather than economic gains. However, Trump time and again has told the media that a cut in corporate taxes would boost hiring and production for those companies. Furthermore, he theorizes that lower taxes will equate to lower prices on products and services too.

Plenty of positives come with the proposed reform too. For starters, the proposal includes an increased standard deduction for households, and there is a modest tax cut for middle-income families. The process of filing a return is simplified in his revised code too.

The plan also ends the home mortgage interest deduction. Real estate agents and home builder associations argue that a cut like that would decrease the benefits to owning a home, thus decreasing sales in the country.

Swelling Federal Deficit Forces Opposition to Question Plan

While there is plenty in the tax reform, an equal amount is missing. The $1 billion infrastructure is not in the plan, but Trump’s team promises that the imposed tax rates for foreign companies and other increases will account for the funding.

The new scheme does cut off the difficult portion of the tax code. Ultimately, it simplifies taxes for everyone. There are loopholes finally closed off too – something his opposition seems to neglect to mention. Furthermore, the proposed plan increases other taxes so limit the impact of the dramatic cuts elsewhere in the reform.

However, these benefits might not fully address the deficit. That said, Democrats tend to highlight the business cuts and how they would help Trump’s enterprise too. They do not, however, mention how much revenue the country would gain with the additional taxes collected.

Democrats are particularly critical of the plan’s impact on the real estate market. Some have already spoken out about way Trump’s reforms are set up to benefit him, and not the American public, though others point out that Democrats aren’t seeing the bigger picture.

Many Republicans support the lowered taxes, especially for small and large businesses. Right now, corporations are required to pay an astounding 35% in taxes. The cut to just 15% would dramatically improve business profit margins.

For now, Trump’s plan has its pros and cons, but it ultimately be up to Congress to digest and decide on.

Gasoline Prices Take a 19-Month Hike

April 13, 2017 By Bill Leave a Comment

The average prices for gasoline increased to $2.38 per gallon in the nation. This is a 19-month high, and with spring driving season in full swing, motorists might see an additional 10 to 15 cents added on.

Some states report drastic increases, with Massachusetts hitting 5 cents per gallon more. While still 15 cents lower than the national average, it is 24 cents higher than their price at the same time last year – which is a significant rise.

Just one week ago, gas prices were 12 cents lower, and the demand for filling up and getting outside to explore the outdoors will only bring higher prices – especially in the high-demand driving months of summer.

Higher Prices in the Spring

Gas prices generally rise in the spring due to supply and demand issues. Refineries also switch to their summer driving fuels, which are costlier to produce than other seasons.

Experts at the Oil Price Information Service feel that 10 to 20 cents more for spring and summer are likely, but anything more than that would be detrimental. They also report that gas per barrel should remain at the mid-$50s. However, they do note that there are geopolitical factors and other events that could cause dramatic rises in the cost per barrel. If that occurs, then prices are likely to jump much more than 10 to 20 cents per gallon.

Comparing Prices to Last Year

Last year gas prices were stable and peaked at $2.379 in June. Now they are 34 cents per gallon more than the same time last year. So far, the gas market was working on moving downward, and prices remained flat.

Consumer spending data is starting to look much weaker, and with consumer spending accounting for more than two-thirds of the country’s economic activity, the economy only saw an increase of 0.1%.

The higher gas prices were expected; so, the increase does not shock experts. Oil prices quickly rose higher than they were even last year per barrel. Also, the decline in crude during the bottom of February 2016 and the doubling of per barrel prices made experts sure of a raise soon enough.

Syria and Gasoline

Unfortunately, gas prices could go much higher due to the issues between the United States and Syria. After all, the crude oil has already risen after the bombing, and if further attacks occur, that could force OPEC and their partners to extend a production agreement or ignore the production agreements entirely.

Other experts disagree that the activities in Syria will influence gas prices. However, it is a wait-and-see game now. The premium for crude has moved higher since the bombing of Syria, but not enough to justify theories that a war in Syria will directly influence higher gas prices.

As of Monday, April 10^th, WTI oil futures were trading at just under $53 per barrel. However, these prices are going to rise along with the prices consumers see at the pump.

President Trump Scraps Tax Plan – What’s Next?

April 12, 2017 By Bill Leave a Comment

President Trump has scrapped his tax plan that he campaigned for weeks on and is now back to the drawing board. He needs a Republican consensus that will allow him to overhaul the U.S. tax system and create budgetary cuts. So far, he has yet to succeed in any of his promises from the recent election – and taxes might be yet another failure for his administration.

Trump Promises an August Delivery

While skepticism grows over the tax plan, Trump still promises that it will release by August.

Increasing nervousness over the stock market and GOP tax reform is not helping the administration. However, this was a central promise to voters that Trump must fulfill to see better ratings from the public.

Businesses and stock markets are looking for reassurance that tax reform will happen; therefore, they assume that President Trump will show more activity in the reform sector. They are hoping Trump will demand a bill on his desk no later than August 1, reports The Hill.

The administration started their plan in the early stages of their administration, but none of the details were released. However, some of the proposals theorized were highly unorthodox, including cutting payroll taxes.

Administration officials state it is unlikely a tax reform will occur before the August deadline, however, Trump still moves quickly past each blockade to try and reach his goal.

Learning Lessons from Failed Healthcare Reforms?

So far, Trump’s administration is still licking their wounds from their failed health care reform attempt. White House aides are working on passing tax legislation that will please the Democrats and Republicans, and they have had listening sessions with both parties to get ideas.

The White House is taking an active role in tax reform, especially because the hands-off approach from healthcare reform failed to produce results.

Taxes for the Rich?

The White House says their goal is to cut tax rates so that the economic picture turns upward. However, that means low and mid-income ranges might pay more in taxes, while the higher earners receive better tax cuts. Trump’s proposal is that better taxes for the rich turnaround and benefits the poor.

Trump is a famous deal-maker, so he will have to cut his tax reform in particular places if he wants to please both sides of the House.

A bipartisan agreement is likely on business tax reform because lowering rates for businesses will bring higher revenue, growth, and more jobs. Trump has suggested that $1 trillion in capital could happen if they were to create a 10 percent repatriation tax for businesses.

Infrastructure spending is one that will win Democrats over – if deployed correctly. Democrats want to see improved infrastructure, and building and industrial unions do too. Trump needs to create an infrastructure fund in his tax reform plan if he wants Democrats to sign off on the new scheme.

Right now, the group is hitting a roadblock with finding alternative ways to fund Social Security, because they want to cut corporate tax rates and payroll taxes – which are Social Security’s initial funding.

Stocks Take a Hefty Drop with GOP Health Care Plan in Limbo

March 28, 2017 By Bill Leave a Comment

March 21, 2017, saw a dramatic decrease in the stock market with financial names falling more than 2.5 percent, reports Fox News. One driving force behind the drop is the uncertainty that Trump will reach his fiscal policy promises, most particularly is the GOP’s health care plan that is not quite certain.

Some traders attribute the decline to a lack of progress on the hoped for policies Trump’s administration made during the inauguration, including the fiscal stimulus package and tax cuts. Government-bond yields and the dollar also took a hit on the 21^st, with the major indexes heading down a steep decline –and possibly the steepest seen this year thus far.

Dow Jones Drops 200 Points

The Dow Jones Industrial Average fell approximately 200 points, with Goldman Sachs currently taking the host of the losses. So far, the session is on track for the harshest numbers since October.

Now the stock market is entering their middle of the range yield for 10-year investments. Unfortunately, the drop in stock value has taken the spotlight away from a recovering economy.

Also, the United States saw mixed yields, with their 10-year note holding at 2.42 percent and the two-year note trading for 1.26 percent. The lower interest rates on loans are likely to blame for poor yields and stocks from financial institutions, however.

Affordable Care Act to Blame for Stock Market Issues?

Republicans are working on a replacement for the Affordable Care Act, and Trump has threatened members of the House that if the bill does not pass by Thursday, those individuals may no longer have their seats as of 2018.

For investors, the healthcare uncertainty is creating a harsher result. If Trump cannot successfully repeal and replace the former health care laws, it will call into question his ability to follow through on other promises. Investors are losing their confidence in Trump’s administration until he follows through on his biggest promise to reform health care.

Health care reform will not directly impact the stock market, but it will indirectly affect financials and stocks for the future. If the health care reform is not successful, it will make investors question what the president and Congress can do, and some investors may lose their confidence in the new administration, which decreases the number of investments for the future.

Other areas that are tied to the outcome of the health care reform are things like tax reform, tax holidays, infrastructure spending, and regulatory changes. Therefore, investors are wary that the stalls on the health care bill are just a sign of more stalls on future promises from the administration.

While the Dow took the hardest hit, the S&P 500 only dropped 23 points. If the points move further, they will certainly be within the range of the lowest stock numbers for the year, and the financial sector is likely to be the hardest hit. The Trump plan to roll back a regulation that affects financial businesses along with the Federal Reserve decision are just two areas that investors will be watching.