If Comey’s testimony creates doubts about the Trump presidency continuation which would jeopardize infrastructure, health care etc. projects, the expectation would be that the stock market would head lower, the U.S. dollar would get weaker, interest rate futures would increase, gold would increase and crude oil prices would increase.
If the market does react to this, I would expect this reaction to be temporary because it must also be remembered that whatever comes out in the testimony it could be a long time before it actually has a direct impact on the presidential administration. This would mean that if the market does go lower it would be expected to be a short-term break because it would be a market moving lower on the anticipation of what the possibility of future results. This type of movement rarely causes a sustained downward trend.
Dan Gramza is President of Gramza Capital Management Inc. and DMG Advisors, LLC. He provides daily market updates from around the globe on subjects ranging from the Nasdaq and currencies to crude oil and grains at dangramza.com.