The market seems to be struggling off the realization that tax cuts aren’t happening immediately, which leaves open the notion it might not happen in 2017.  The fact that Obamacare comes first is worrisome to me, and while it may not be as “complicated” to Sec Mnuchin’s point on tax reform, it carries more political risk.  For now, the market is thinking it will all happen, but that sort of conventional wisdom can turn swiftly.

In fact, the market is selling metals and construction names today over scuttlebutt based on a report from Axios saying that infrastructure will be pushed off to 2018.  A cynical piece which makes fun of the idea that such a delay would be the result of logistic considerations rather than finding funding.  I have a hard time seeing republicans blowing this, in part because of the immediate need and bipartisan agreement.   For now, investors are taking profits and pushing the SLX (Steel Index) down 2.3%, but it is still up more than 14% this year.

No matter how this all shakes up, once again, Washington D.C. proves to be a labyrinth of self-interest and small thinking.   This makes exact modelling difficult, but I think promises will be kept.

SLX