NEW YORK (Reuters) - U.S. Deputy Attorney General Rod Rosenstein, who oversees the special counsel investigation into Russia’s role in the 2016 presidential election, headed to the White House on Monday amid reports he has offered to resign in anticipation of being fired by President Donald Trump, media reports said.
PETER TUZ, PRESIDENT OF CHASE INVESTMENT COUNSEL IN CHARLOTTESVILLE, VIRGINIA:
“It does bring up the chaos-in-the-White House thoughts again, which just doesn’t instill a whole lot of confidence about the administration nor the results of the midterm election coming up in a six-week period or so, making the odds of a Democratic takeover of the House even more certain and putting the Senate in a little bit more play as well.”
“Following up with the whole Kavanaugh thing, it is just chaos in the White House and we like a stable White House as opposed to a chaotic one.”
“Even though the economy is doing well, the stock market hit all-time highs last week, just this kind of turmoil tells me that there are some people who might want to take some money off the table.”
MARK GRANT, MANAGING DIRECTOR AND CHIEF GLOBAL STRATEGIST AT B. RILEY FBR, INC, FT LAUDERDALE, FLORIDA:
“If Rosenstein resigns, as opposed to being fired, then I expect very little market impact. It is certainly his right to resign. If it turns out that Rosenstein is fired then the markets may react to President Trump making the decision and what it might mean for Mr. Mueller’s tenure. There is a large question now also about the longevity of Mr. Sessions and it is never good when the government shows signs of mayhem. All of this could have a negative effect on the dollar. In terms of the midterms, I think the jury is still out. Public sentiment could swing quickly one way or another as details come out about Judge Kavanaugh’s situation along with the public’s perception of the DOJ and the FBI. I am not a believer yet in some sort of “Blue Wave.”
“I can say, that after 44 years on the Street, that the markets do not like commotion, uncertainty and chaos and all three seem to be present now. It may not be “Buyer Beware,” but anyone with a portfolio of equities or debt should be in the “Owner Beware” position.”
KEN POLCARI, DIRECTOR OF THE NYSE FLOOR DIVISION AT O’NEIL SECURITIES IN NEW YORK:
“I would imagine that is kind of what dragged the market lower even though in and of itself it doesn’t price stocks. But the news is negative enough to put pressure on the market along with the China tariffs and Kavanaugh stuff.
“The Rosenstein stuff is just another negative story that is piling on top of the other negative stories out there today, China obviously being the biggest negative, that is the one that really has the potential to price stocks. Kavanaugh and Rosenstein don’t have the potential to price stocks but they do have the potential to add more negative conversation. It gives people a reason to take money off the table.
“I don’t necessarily think it’s a complete disaster, once investors start to put the Kavanaugh stuff and the Rosenstein stuff in its rightful place, stocks will find a rebalance and they will stop selling off. Nothing has happened here that we didn’t know was going to happen. The 10 percent tariffs went into effect, then the Chinese retaliatory tariffs went into effect – that is not new news – everyone knew it was going to happen. That is why most of it is just a knee-jerk reaction.”
MICHAEL O’ROURKE, CHIEF MARKET STRATEGIST, JONESTRADING, GREENWICH, CONNECTICUT:
“The Rosenstein headline seemed to be what created the last push down (in stocks)... I think it’s just further lack of clarity from the administration and the direction it’s going. I don’t think people are truly alarmed yet, but that’s probably in the back of people’s minds.
“But people are in a holding pattern here. There is that looming fear that the administration will accelerate the (next round of tariffs), so it makes it hard to go out and buy if you know there’s another potentially negative headline to come out.”
JOE MANIMBO, SENIOR MARKET ANALYST, WESTERN UNION BUSINESS SOLUTION, WASHINGTON:
“It’s not a complete shock that Rosenstein resigned given the recent headlines. This is certainly keeping political uncertainty at an elevated level before the mid-term elections and a reason for caution in financial markets. If things get out of hand, I expect the dollar to get some additional support here, on top of the rate outlook from the Federal Reserve.”
TOM SIMONS, MONEY MARKET ECONOMIST AT JEFFERIES & CO. IN NEW YORK
“It seems like that’s what’s moving the Treasury market, but to be honest, I’m not sure why the move is so big. It appears that stocks are coming off, which may or may not be related to the news. But in light of that the Treasury rally makes sense.
“It creates a lot of uncertainty about what’s going to happen with the Mueller investigation, but I’m surprised that this would be a risk-off move. In some sense, Trump is very good for the economy and markets. If he were to appoint someone to replace Rosenstein and that were to weaken the teeth of the Mueller investigation, you would think that would clear the way for more pragmatism on the economy and less distraction from the investigation. It’s possible it’s just a bit of a shock, and I wouldn’t be surprised if this reverses once people put that into perspective.”
STOCKS: Stocks extended losses on the news, with the S&P hitting a session low, down 0.5 percent, but then retraced some losses and was last down 0.3 percent.
BONDS: Benchmark treasury yields slipped, but then regained some ground, with the 10-year last at 3.0777.
FOREX: The dollar index lost ground but then regained some, and was last down 0.2 percent.