Trump setback casts doubt on US reflation play

THE failure of the Donald Trump adminstration on Friday to convince US lawmakers to repeal Obamacare and pass new healthcare legislation will undoubtedly cast doubt on the administration's ability to deliver on its election campaign promises.

Specifically, a central pillar of those promises was a "phenomenal" fiscal plan that would involve generous tax cuts and massive infrastructure spending to boost the US economy. Based on those promises, Wall Street had risen to several all-time highs after the November elections as traders bought into a "reflation" play; now that the healthcare initiative has folded, one has to wonder - will the same fate await the Trump budget, and if so, whither US stocks?

BBC News said the healthcare vote collapse was not just bad, it was a disaster especially since Republicans control the House.