The New York Times reported that Cohn, who is Jewish, was "disgusted" and "deeply upset" by the president's remarks at Trump Tower on Tuesday. Top Trump adviser Steve Bannon also took a swipe at Cohn in a surprising interview with The American Prospect, referring to him as beholden to "Goldman Sachs lobbying."

Cohn is viewed as a major ally to the business community in the Trump administration and a steadying voice of reason. He is one of the "Big Six" leading the way on tax reform efforts and is also helming the search for the next chairman of the Federal Reserve. Cohn himself is among the top contenders for the spot, alongside current chair Janet Yellen.

In other words, Cohn dropping Trump would be a big deal.

Eoin Treacy's view

I moved to the USA because my family has never felt so welcomed anywhere and I truly believe this is one of the best places in the world to raise my children. They have blossomed academically, emotionally and physically since we moved here and we couldn’t be happier. Politics notwithstanding.

The internet is a unifier but that applies to all groupings and it has certainly helped fringe groups to find common cause. However, it is worth highlighting that the KKK, white supremacists and other extremists are fringe movements likely now relishing the increased media attention they are receiving. Populism, reactionism and extremism all tap into emotional cues that can exaggerate the emotional quotient of the crowd. They need to be met head on with rational argument but the broader question is whether the root cause of the disaffection, being given voice by the resurgence of these movements can be dealt with effectively. 

Like many people I have strong political opinions but I try my best to avoid political commentary. However sometimes it is unavoidable when it intersects with markets. As emotional and charged as the Charlottesville attack is the much bigger question is can the Trump administration get tax reform through? 

It’s a big question and Gary Cohn is big part of the answer. He announced today he is staying on in his position which is a measure of how important he believes his role is against a background where President Trump’s handling of the Charlottesville attack has been ham-fisted, confrontational and importantly raises questions about his ability to provide a unifying voice for the nation; capable of healing wounds rather than creating new ones. This is yet another distraction from what are essential economic objectives. 

The US tax code is not only byzantine in its complexity but it has one of the highest corporate tax rates in the world. The international success of US businesses is practically unparalleled so if they could be encouraged to repatriate their overseas income, invest in domestic growth and if a pro-growth tax code were introduced it would be very bullish. The stock market has rallied impressively since the election on enthusiasm for that scenario as well as improving earnings. It pulled back today as investors react to the possibility that a Republican House, Senate and President might not actually be able to get a tax cut through. 

The S&P500 has held a progression of higher reaction lows since early 2016 but the rally following the election has been notable not only for its persistence but for how shallow reactions have been. As mentioned in previous posts and audios the Index has paused in the region of the psychological 2500 and at least a pause is underway. 

Right now, this reaction is in the order of 57 points. Since November most reactions have been around 50 points while the largest was 78 points. A pullback of more than 80 points will be required to signal a possible a reversion towards the mean is unfolding. It is not beyond the bounds of possibility that we get a somewhat larger reaction in the region of a big psychological number like 2500. The fact the major Wall Street indices are all near big round numbers increases the possibility we could be in for a more volatile period. 

Considering how low volatility has been and how long that condition persisted, even 1% moves in the Index are having exaggerated moves on the VIX. Regardless of what causes it big moves in the VIX have a negative effect on the size of automated trading systems’ positions so it is also worth monitoring.