U.S. equities and stock exchange traded funds strengthened Friday as investors braced for the final tally on the healthcare bill that is seen as a dry run for President Donald Trump’s ability to pass his promised legislations through Congress.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were 0.2% higher Friday.
Meanwhile, the Health Care Select Sector SPDR (NYSEArca: XLV), the largest healthcare exchange traded fund, was up 0.1%.
After a one-day postponement, the vote to replace the Affordable Care Act, or Obamacare, is expected to go through in Congress, reports Riva Gold for the Wall Street Journal.
Many observers are using the bill’s outcome as a measure of the Trump administration’s ability to pass through other policy changes, such as tax reform and infrastructure spending that could stimulate growth and keep the momentum going in U.S. equities.
However, several reports by mid-Friday have suggested that Republicans don’t have the needed votes to pass the bill through the House of Representatives.
“You don’t know how to handicap the rest of Trump’s agenda until you know how this vote goes,” Justin Wiggs, managing director in equity trading at Stifel Nicolaus, told the Wall Street Journal. “Until then, we sit and wait.”
Stock-trading volumes also suggest that many traders are in a holding pattern until the outcome of the healthcare bill, with equities set for one of their slowest trading days this year.
“No one has any idea what’s going to happen with this vote so they are sitting there waiting for actual information rather than theory,” Ben Kumar, an investment manager at Seven Investment Management, told Bloomberg. “In general you can ignore the politics and trade on the underlying fundamentals. The market is still fundamentally intact.”
For more information on the markets and U.S. Stock ETFs, visit our S&P 500 category.