STI drops 0.85% over week ahead of US healthcare vote

THE local market has always been vulnerable to external developments, most of the time those in the United States. Frequently, the focus is on the US Federal Reserve's actions and guidance with regard to interest rates; however, although this week's action provided a good example of America's influence here, this time it wasn't the Fed that held the market's attention; rather, traders waited to gauge Wall Street's reaction to developments in the US House of Representatives.

Specifically, the concern was that if the Trump administration fails to convince the House to vote for its healthcare plan, then this would cast serious doubt on future plans to push through fiscal and spending plans on which the stock market's post-US presidential election rally was built on.

As it turned out, a Thursday vote was postponed because members could not agree on terms. Reports suggest that it would be delayed until Friday. In the meantime, news that President Donald Trump has threatened to walk away from the Bill and move on to tax reform if the House rejects it had, oddly enough, pushed the Dow futures higher in Asian trading on Friday.