This is all about politics, but recent sessions suggested this could happen (see the morning commentary).

"Volatility could increase and there could be selling on the news, but the investment proposition goes well beyond the tax reform."

We don't have to force the issue right now, and I'm not sure about buying into the weekend.  That said, the news and speculation that Michael Flynn is going to testify against President Trump creates a major cloud of confusion and angst.  By the same token, White House counsel released a statement that seems to welcome the news that Flynn admitted to lying to the FBI, and says it’s why he was fired.

Then there's the tax bill, which has been on a razor's edge all morning.  I think there will be a deal on the Senate bill that gets 50 GOP votes, perhaps even more, and in the process, it might even see a true embrace of supply-side economics. There is no doubt the scoring on the final bill will suggest massive deficits that Republicans in both chambers are going to have to argue is the result of static scoring rather than dynamic action that traces the true nature of the flow of money.

For the moment, there are two big worries and a market that wanted to come down in the first place.  We are looking to buy the dip, but not forcing it and not trying to guess the bottom, but our investment thesis is stronger than ever.

Keep in mind, the main theme of the morning report and much of the work this year is the economy is back, and momentum is strong. 

Manufacturing Renaissance

Speaking of which, the PMI report on manufacturing pulled back from its 13-year high, but it is still very strong as 14 of 18 industries reported increased strength.

ISM Manufacturing Trends

Key Observations