Cantor exit raises Wall Street fears of renewed debt fight

U.S. House Majority Leader Cantor and House Speaker Boehner address reporters after a Republican caucus meeting at the U.S. Capitol in WashingtonBy David Gaffen NEW YORK (Reuters) – House Majority Leader Eric Cantor’s shocking defeat isn’t likely to have much effect on U.S. financial markets — unless his departure emboldens Tea Party Republicans to again threaten a government shut-down over the debt ceiling next year, investment strategists said. Even though most of the items on Wall Street’s legislative wish list, particularly corporate tax reform, were already viewed as non-starters over the next two years, Cantor’s departure may roil the relative calm that’s prevailed since the bipartisan budget deal of December 2013. “It underscores total political dysfunction,” said Doug Kass, president of Seabreeze Partners Management in Palm Beach, Florida. “At some point the danger of no deal on the debt limit or increased wrangling raises the likelihood of a major repricing in stocks.” The Tea Party Republicans who supported the 2013 government shutdown may believe that Cantor’s defeat opens the door to another such battle, according to Greg Valliere, chief political strategist at Potomac Research Group in Washington.

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