Will the Stock Market Crash If President Trump Is Impeached?

The following is not original but rather excerpts from postings one might find with a bit of a search.  In any case, it is interesting reading and thus I have re-posted for you.

House Speaker Nancy Pelosi said Congress should pursue an impeachment inquiry of President Donald Trump regardless of its impact on financial markets’

Pelosi also said the markets will do what the markets will do, regardless of who Democrats pick as their 2020 nominee, and who wins the presidential election. She said she wouldn’t blame Elizabeth Warren if markets reacted negatively to her possible nomination.

“I said to the members, we cannot be undermining the markets here, but you can’t be the United States of the markets. It’s not that. It’s the United States of America,” Pelosi told a roundtable with Bloomberg reporters and editors on Friday.

Pelosi’s comments came the day after the House voted to formalize the impeachment inquiry of Trump. The president, who often brags about market performance during his tenure, said impeachment is “hurting our Stock Market.”

Despite Trump’s claims, impeachment proceedings haven’t shown up in stock prices. Better-than-expected gains in U.S. jobs in October and signs of progress in trade talks with China Friday sent the S&P 500 almost 1% higher to a fresh record.

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That said, the president’s impeachment inquiry will have an impact. And investors can take measures to prepare themselves for anything in this uncertain market. That starts with sticking to cold, unemotional facts.


Here’s what we know about the impeachment plan, including what it’ll mean for the stock market based on historical facts. Just because impeachment may not cause the next stock market crash doesn’t mean it won’t affect your portfolio…

What Impeachment Means for the Stock Market

First, if you’re reading the signs and anticipating the worst, just know that the stock market hates uncertainty.

Investors were already uncertain about trade with China, and now they’re uncertain about the possible impeachment of a president. And if you add yourself to the fold of worriers, you’ll fall too.

So it’s important to remember that we have things to be certain about. Here’s some precedent to help us figure out what to do with our money.

In 1974, when Richard Nixon was under pressure before finally resigning his office, the economy was not very good even before his scandal broke.

The 1973 Arab oil embargo was a huge shock. Unemployment was rising, “stagflation” – the combination of a stagnant economy with inflation – was the buzzword of the day, and market leadership by the “Nifty Fifty” was gone.

In 1998, when Bill Clinton was actually impeached by the House, the global economy was still reeling from the 1997 Asian Currency Crisis. Commodity prices were also down, led by oil.

Fast forward to today, and the economy is at or near full employment, we’ve got no inflation whatsoever, businesses are still confident, and wages are still rising.

Think about it for a moment. The stock market set all-time highs in June and came close again in September.

That’s quite a different backdrop. At the very least, it means that the economy is prepared for the worst-case scenario.

But based on precedent, the worst-case scenario is not very likely. We’ll tell you why, and then we’ll get into what it really means for your money.

What Exactly Is Impeachment?

The first step of impeachment is for the House of Representatives to investigate alleged “high crimes and misdemeanors” committed by the president. If it finds sufficient evidence, it votes to pass the articles of impeachment, which are formal allegations of wrongdoing.

If the vote passes by simple majority, the president is officially impeached.

Next, the Senate conducts a trial. If convicted by a vote of two-thirds majority, the president is removed from office. Neither Bill Clinton nor President Andrew Johnson in 1868 were convicted by the Senate.

If you follow politics, the odds of the Republican-controlled Senate voting to convict are small. Therefore, the removal of U.S. President Donald Trump seems unlikely.

But what if it happens?

Vice President Mike Pence will become president. And likely there will be little change in economic policy.  So nothing happens to the market.

Based on what we read in the articles, it appears it is best to study and practice good trade techniques and consider the fundamentals of the market rather than worry about rumors of gloom and doom. Who sits in White House after the presidential election will likely be of far more importance to the markets than the impeachment proceedings.

Happy Trading,

Gary Odom

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