After a couple of relatively quieter weeks, things are going to pick up in a big way. Volatility remains modest but a slew of economic data, earnings reports and events from the political front could make this a more turbulent week than we’ve seen lately. There’s almost too much going on to summarize in one paragraph so let’s break down each group of events separately.
Tax reform, a government shutdown and the French election
Voting in the French presidential election just wrapped up and it looks like Marine Le Pen and Emmanuel Macron will advance to the runoff election. Most eyes are on National Front party candidate Le Pen, the far right candidate who’s been likened to Donald Trump for her populist views. Macron is the former economy minister. The second round of voting will take place on May 7. The results of this election are notable for several reasons. First, if the results come in as expected, it will be the first election in generations where the two primary political parties will not be represented in the second round. Second, tensions are high in France right now following the shooting on the Champs Elysees that left one officer dead and two others injured. About 50,000 police and 7,000 soldiers were deployed around the country. Third, a Le Pen victory could signal the end of the EU. She has expressed an interest in withdrawing from the group and returning to the franc. Le Pen’s supporters are strongly in favor of a referendum to exit the EU and a second major country exodus from the group could signal trouble for its long term viability.
Congress has a deadline of Friday to pass a funding bill in order to avert a government shutdown. The Trump administration wants border wall funding as part of the deal, a notion that Democrats have balked at. Trump has recently raised the idea that he could focus on Obamacare repeal again and may use that as a bargaining chip to get funding for the wall.
If that weren’t enough, Trump announced on Twitter last week that on Wednesday he will unveil his tax reform plan.
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