Stocks have blasted off out of the gate, with the Dow up 100 points and the S&P rising over 0.5%, and the VIX getting clobbered following an early morning report from Politico that "Trump’s top aides and congressional leaders have made significant strides in shaping a tax overhaul, moving far beyond the six-paragraph framework pushed out in July that stoked fears about their ability to deliver on one of the GOP’s top priorities."

With Trump tax (and any other reform), having recently been left for dead, even a modest sign that Trump's fiscal reform may be getting traction is enough to awake the animal spirits, and that's precisely what Politico has achieved. The report also adds that "there is broad consensus, according to five sources familiar with the behind-the-scenes talks, on some of the best ways to pay for cutting both the individual and corporate tax rates."

Among the options listed are:

• capping the mortgage interest deduction for homeowners;
• scrapping people's ability to deduct state and local taxes;
• eliminating businesses' ability to deduct interest, while also phasing in so-called full expensing for small businesses that allows them to immediately deduct investments like new equipment or facilities.

As several desks have pointed out, if this report is accurate, tax reform - now that Bannon is gone - may once again be on the table. Furthermore, while there will likely be disagreement about the final draft, the fact that there is "consensus" among top players, means it could eventually morph into an actual law, boosting corporate earnings - i.e., the very reason why stocks soared in the days after Trump's election. And while Trump's Obamacare repeal debacle exposed the deep divisions within the GOP, tax reform is expected to be a less controversial issue, and now that Trump appears to be taking a more centrist approach, any new approaches to Congress may result not only in new highs, but mark the first major legislative victory of the Trump presidency.

Then again, it can all be wiped away as soon as tonight, when Trump will deliver a speech to his "base", in which he may promptly burn any of the goodwill he created with capital markets following his far more conventional Afghanistan speech last night.