Senate

After a planned series of votes on the Trump tax plan were called off last night, GOP senators were scrambling to assuage the concerns of Republican holdouts who suddenly decided that the tax bill would blow out the deficit after one proposal – a so-called “trigger” that would automatically raise taxes if revenue targets aren’t met – was rejected by the Senate Parliamentarian. With the first roll-call vote set for 11 am, Republican leaders were scrambling to have amendments of their own lined up for later in the day, with a vote hoped for by late Friday or early Saturday.

Markets were thrown for a loop in the past 24 hours, with the Dow first soaring nearly 400 points on Thursday on expectations that tax reform was a done deal, when drama emerged just after the close when the Senate tax bill came this close to falling apart when the proposed "Trigger" was ruled as invalid, pushing a Thursday tax vote to this morning, and as of this moment the bill appears in limbo with the GOP scrambling to find ways to appease the sudden loud opposition among budget hawks. UBS economist Paul Donovan summarized it best this morning:

In a dramatic showdown on the Senate floor on Thursday afternoon, the Senate tax bill came this close to being killed by deficit hawks, and in the resulting chaotic aftermath, votes and debates which were scheduled for Thursday evening have now been pushed back to Friday morning. Who could have possibly foreseen it? Well, anyone who listened to Dennis Gartman on CNBC this afternoon, for one.

Following the backing of Sen. John McCain on the GOP tax reform bill, markets have surged to new all time highs as tax-sensitive banks lead the way, with Bloomberg reporting that odds for the tax bill's passage may increase to "near-certainty" if the Senate can finish its version in the days ahead, citing Evercore ISI.  And speaking of banks, the KBW bank index is up over 1.3% to the highest since Oct. 2007, outpacing the S&P 500’s 0.7 percent gain.

Despite a Wednesday dive in high-flying U.S. tech stocks on worries their boom may have peaked following a MS downgrade, which presured Asian stocks leading to a slide in Hong Kong and South Korean share, on Thursday morning the dip buyers have emerged and both European stocks and US equity futures are once again solidly in the green as yesterday's tech selloff is quickly forgotten.