Roger Stone? Who is that? And who cares?
That appears to be the initial take of many investors, who started Friday with images of one-time Trump confidant Stone being escorted out of his Florida home by law enforcement. Stone was arrested in special counsel Robert Mueller’s investigation into Trump campaign officials and charged with lying to Congress and obstructing the probe.
During a media circus in the afternoon outside of a Florida court, Stone said he would not testify against President Trump. Despite the onslaught of seemingly negative news — which could weaken the president further with his poll numbers plummeting amid the ongoing government shutdown —the major stock indices barely budged.
Wall Street veterans Yahoo Finance spoke to aren’t surprised by the market’s muted reaction.
“The market is still bulled up on earnings,” Emily Roland, head of capital markets research at John Hancock, told Yahoo Finance. Roland acknowledges that while fourth quarter earnings from the likes of Intel and IBM have beaten lowered expectations, they haven’t been as bad as people feared.
Other sources Yahoo Finance chatted with suggest positive earnings from Intel, IBM and Southwest Airlines this week indicate upbeat results from key tech names like Microsoft and Amazon shortly. If Big Tech could deliver — as Netflix did recently — stocks could ignore headline risk in the form of Stone’s indictment and implications for the president.
Stock market remains immune
Meanwhile, some on Wall Street believe the indictment of Stone is nothing new. After all, former Trump lawyer Michael Cohen’s fall from grace has played out in front of investors almost daily for months. And as a result, the market has become immune to Mueller’s efforts and Trump’s past — at least for now.
“The market has become normalized to this, these indictments have been telegraphed,” said Brad McMillan, Commonwealth Financial’s chief investment officer.
SunTrust Chief Markets Strategist Keith Lerner said, “This is yet another concern on the ongoing carousel of concerns. This certainly adds another uncertainty, but I do not think this drastically alters the overall narrative.”
Lerner believes the market is more fixated on the outcome of meetings between the U.S. and China to resolve their trade differences. Further, with the Federal Reserve likely to strike a dovish tone at its first meeting of the year other sources think there is good reason for markets to keep their bid.
Until there isn’t, tread carefully.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi
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