President Trump is convinced that if the House of Representatives ever impeaches him, the stock market would nosedive.
Although it’s early days, markets appear skittish, thanks to Trump’s new political predicament.
Strategists at JPMorgan are already warning clients, “it would be complacent to think that the impeachment process just adds another ring to the circus.”
They point to four important variables that could affect stocks. (Axios)
1. “US constitutional conflicts like the impeachment process are rare events, with [prior] market outcomes too context-specific” to use as a rubric.
2. “The unique context now involves four elements — global growth slowdown, classic late-cycle vulnerabilities, high market valuations but somewhat defensive investor positioning.”
3. The “international wildcards are the implications for US-China trade and US-Iran relations.”
4. “The domestic wildcard is the implication for 2020 Presidential and Senate elections.”
Be smart: Analysts at BMO Capital Markets point out that the Fed was “in the midst of a 75 bp fine-tuning series of rate cuts” during former President Bill Clinton’s impeachment scandal and “should probably get more credit for the positive growth sentiment than the risk of a presidential ousting.”