While President Donald Trump surely isn’t thrilled about the possibility he’ll be impeached by the Democrat-controlled House of Representatives, some financial experts say it could actually be a boon for investors.
Of course, even if Trump is impeached in the House, the GOP-controlled Senate is highly unlikely to convict their president, assuming more damaging information doesn’t come out.
What they’re saying:
Fross & Fross Wealth Management money manager Thomas Fross: “This impeachment process may actually be good for U.S. equities. Trump could fight only so many battles. With everything going on with his own reputation and the likelihood of him being elected next year, he will begin focusing a lot more on that and probably a lot less on China. That means either a trade deal with China gets put on the back-burner, which would not be the worst deal for U.S. investors. Or, Trump comes out with a watered down deal to just get it done and behind him.”
Invesco Chief Market Strategist Kristina Hooper: “We could have the Fed stepping in and saying just like with trade, we’ll try to be more accommodative maybe with another insurance cut if they are worried there could actually be an impeachment to really breathe confidence into markets. So it could turn out to be a positive. The Trump administration’s policy agenda has been a mixed bag. Part has been pro growth like tax reform. But one could argue that their trade policy runs antithetical to growth. So, the presumption could be you will see a mixed reaction if there is another president because there would be the potential for the trade wars to go away depending on who that next president is.”
While Wall Street has largely ignored the impeachment kerfluffle, it hasn’t ignored the U.S.-China trade war. In fact, the market swings up and down with nearly every word uttered or tweeted, positive and negative, respectively.
At this point, analysts expect a Trump impeachment and an ensuing rally would resemble what happened after Bill Clinton was impeached. In the two months before Clinton was impeached, the S&P 500 rallied 10%.
Meanwhile, the present-day Trump economy is still enjoying unemployment lows not seen in 50 years, leading the experts to believe the market would withstand some nasty impeachment headlines and stories.
Editor’s note: Do you think impeachment would be good or bad news for the stock market? Share your thoughts below.