S&P futures fall after former Trump lawyer Cohen says candidate directed him to pay off porn star

Cohen, Trump’s former personal lawyer and so-called “fixer,” agreed to plead guilty on Tuesday to eight charges related to tax fraud, excessive campaign contributions, making false statements to a financial institution and unlawful corporate contributions.

Cohen admitted to making payments to two women at the direction of an unidentified candidate for political office “to influence the outcome of the election” by keeping information from becoming public. One of the payments, of $130,000, is thought to be a reference to the payment Cohen orchestrated to porn star Stormy Daniels, whose real name is Stephanie Clifford, who is suing Trump.

“This is all noise for the economy and this could be nothing for Trump. That’s why the futures came in, the uncertainty of where this whole thing goes,” said Boockvar.

News of Cohen’s guilty plea was breaking almost at the same time Tuesday afternoon as a jury returned 8 guilty verdicts against Trump’s former campaign chairman Paul Manafort. Five of the counts concerned tax fraud, two bank fraud and one failing to file foreign bank account reports. The judge declared a mistrial on 10 other counts.

For now, some strategists said, the Cohen revelations and Manafort case may not be a big deal for the market. The focus may shift to the Fed. The stock market closed Tuesday tied for the longest bull market, and it could break that streak on Wednesday.

“Do you sell stocks on presidential turmoil or do you buy them on the idea the president will be preoccupied with this kind of scandal rather than the trade issues,” said Marc Chandler, head of fixed income strategy at Brown Brothers Harriman. “Does the market rally on the fact he’s preoccupied?”

“It’s uncertainty but stocks closed pretty firm and we just made record highs,” Chandler said. If stocks sell off on profit taking on Wednesday “is it really a big deal?”

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