COMEY’S COMEUPPANCE: All eyes on Senate Hart 216 - home of the Senate Intelligence Committee where we’re hours away from hearing testimony by former FBI Director James Comey in his first public commentary since being fired by President Donald Trump on May 9th. Comey’s opening statement, released yesterday, is dominating headlines for revealing Trump’s attempts to interfere into elements of the FBI’s Russian investigation and demanding fealty to the president. It also bumped Trump’s pick of Christopher Wray to the back pages. Advantage Comey. While a portion of Trump’s base will defend him at all cost, what will mainstream Republicans do if something more damaging emerges from Comey’s appearance? Trump’s worst case scenario may be best case for the Republican’s on the Hill who are more than ready to move on from this drama and move impactful legislative items. Something tells us this isn’t going away soon. Check out Hedgeye CEO Keith McCullough on the market dip after Comey’s firing here.
YES WE CAN: While Senate Republicans have had a lot of internal debates on what the future of healthcare looks like, it appears they are finally coming together to replace Obamacare. They are expected to get a bill on the floor by the end of June and onto the President’s desk before the July 4th recess, should things go smoothly. The bill will not be bipartisan; McConnell is already going through the reconciliation process, meaning he only needs 51 votes. We are expecting the bill to look similar to the House-passed version, but will still contain moderate provisions like: medicaid expansion options, preexisting condition protection, and mental health/substance abuse protections. Read more from our Senior Health Policy Analyst Emily Evans here.
YOU HAVE A CHOICE: House Financial Services Committee has been diligently working on the CHOICE Act, a bill set to dismantle Obama’s monumental Dodd-Frank legislation. CHOICE is expected to hit the floor of the House today, with a majority of Republicans supporting the effort. Major parts of the legislation include removing power from the SEC and CFPB all the while reducing the regulatory burden on community banks and bank investments. Final votes are expected later today (possibly tomorrow) giving Republicans a much-needed victory heading into the critical summer months. As we’ve said in the past, CHOICE won’t fly in the Senate, but it’s worth tuning in to Senate Banking Chairman Mike Crapo’s hearings today and in the coming weeks for signs of CHOICE that can garner bipartisan support over in that body.
BOOM. THE BEST EARNINGS GROWTH IN SIX YEARS: The first quarter of 2017 could mark the best quarter of year-over-year earnings per share growth since 2011, according to the Hedgeye Macro team. So far, companies within the S&P 500, Nasdaq and Dow have realized earnings growth of between 14% and 18%. This would mark just the second quarter of earnings gains after six quarters of falling growth, from 2Q15 to 3Q17. Given the blockbuster earnings gains, it’s no small wonder that the Dow, S&P 500, and Nasdaq are up 7%, 8% and 20% respectively year-to-date. Talk about bullish!
DEALING WITH CEILING : Treasury Secretary Steve Mnuchin is asking Speaker Paul Ryan to address the debt ceiling before August recess in light of a shortfall in government revenues from the month of May to the tune of $60 to $70 billion and reaching our spending limit sooner than expected. Mnuchin wants a clean bill done before August and Trump has directed Mnuchin to take that path as opposed to the confrontational debt ceiling approach favored by OMB Director Mick Mulvaney and his band of brothers in the House. One way or another, Democrat votes will be needed to get this over the finish line putting Speaker Ryan - like Speaker Boehner before him - in a precarious position with his conference.
