As long as there's still hope that Washington can deliver tax reform this year, investors can look past President Donald Trump's fractured relationship with corporate America over his response to Saturday's deadly white nationalist rally in Charlottesville, Virginia, said The Lindsey Group's chief market analyst.
"The market and the economy do not care about Trump's personality. They will only start to care if it starts to influence the policies that they are hoping for," Peter Boockvar told CNBC's "Squawk Box" on Thursday, a day after two White House CEO advisory councils were disbanded.
"Until they know whether tax reform is going to be kicked to next year because of his political issues now, they're not going to care," he contended.
House Ways and Means Committee Chairman Kevin Brady said Wednesday on CNBC that he's still focused on passing a tax reform package despite tensions over the Charlottesville fallout.
But after saying the day before that tax reform would happen this year, Brady said Wednesday that he's learned "not to pick certain dates." But he added, "2017 is our year to deliver."
A delay in tax reform, including proposed cuts in corporate taxes, would hurt the stock market, Boockvar said. "The Fed is still raising interest rates, tightening in this moderate economy. We need an offset."
The Federal Reserve meets again in September and November. But no rate hikes are expected after those meetings. But the probability of a rate increase at the December meeting was around 48 percent, according to the CME FedWatch tool on Wednesday. The Fed has increased the cost of borrowing money four times starting in December 2015 after about seven years of near-zero percent rates.
"In order to continue this expansion, you need some tax relief and some stimulus kick," Boockvar explained. "Do you put it into extra innings because of tax reform? Yes."
But he said, "The odds are shrinking."