With President Donald Trump mired in an impeachment inquiry driven by House Democrats, Wall Street firm Raymond James studied what effect it would have on markets if he were to just quit.
Of course, Trump is highly unlikely to back down from the fight that is coming over whether or not he held up aid money earmarked for Ukraine to try and force the country’s leadership to investigate Hunter Biden, the son of Democratic primary front-runner and former Vice President Joe Biden.
With the heat rising on Trump after this week’s testimony of senior U.S. diplomat William Taylor, who said the president used foreign aid approved by congress to pressure Ukraine to look into the Bidens — a quid pro quo — House Democrats feel like they have the “evidence” they need to impeach.
“We have smoking gun sitting on top of smoking gun at this point. And there is no alternative story,” Representative Jamie Raskin of Maryland said Wednesday. Taylor’s statement on Tuesday “has dramatically accelerated the investigation.”
PredictIt says the betting odds show a 71% chance of impeachment before his term ends, but an 87% likelihood that Trump ends the year still in office, and a 72% chance that he completes his first term.
But with the likelihood of impeachment moving forward, Raymond James put together a “what if” case should Trump decide to quit before he is impeached.
“While we acknowledge this is a low probability event, the question we are hearing more often in DC is: What if President Trump decides to walk away from the presidency and voluntarily resigns prior to being impeached and/or having to release his tax returns?” Raymond James analysts Chris Meekins and Ed Mills wrote.
And according to their analysis: It wouldn’t have much of an effect at all.
The reason is because Vice President Mike Pence would provide the stability Wall Street needs were he to become president, as unlikely as that is.
“Trump would not go down in history as one of the only impeached presidents,” the Raymond James analysts added. “His tax returns, which he does not want to give to become public while President … kind of become a non-issue. Trump can go make even more money and maybe start his own media network, which reportedly was the initial plan.”
Raymond James predicts that Pence would install the popular former UN ambassador and South Carolina governor Nikki Haley as his VP running mate for 2020. And the market would likely show confidence in a Pence-Haley pairing, Meekins and Mills wrote.
“After the initial shock, we think the market rallies as Pence is a predictable, traditional, conservative choice,” they wrote. “Pharmaceuticals, names related to China trade, defense names all likely rally if there is a belief that it hurts the Democrats’ chances at winning or shores up support for a Republican Senate.”