A second impeachment trial against Trump? How Stock Investors Weigh a Key Political Moment

As an unprecedented second impeachment of President Donald Trump looms in Congress Wednesday, market participants appear mostly unflappable but aware of what is shaping up to be a historic moment in American politics.

The riots killed five people and raised questions in the United States and around the world about the integrity of American democracy and a smooth transfer of presidential power. House Democrats, led by House Speaker Nancy Pelosi, charge that Trump “deliberately made statements that, in context, encouraged, and predictably resulted in, illegal actions on Capitol Hill, such as: ‘If you don’t fight like Hell, you’re not going to have a country anymore. ‘ Yet market participants continue to express the view that Trump’s impeachment, should it pass, or even a conviction in the Senate, are not events likely to move financial markets. Much, unless it affects Congress’s ability to focus on measures to help the economy emerge from the worst pandemic in more than a century. Fears that Biden‘s legislative agenda may be outdated by the focus on impeachment could also cause some stumbling in what has been a steady rally for equity markets to hit record highs this month, backed by support from the law. Federal Reserve and trillions in fiscal aid from the US government last year. “Impeachment is obviously not a good thing for the country with no president,” said JJ Kinahan, chief market strategist at TD Ameritrade in an interview Wednesday with MarketWatch. “But I also think that the market is balancing what [impeachment] it means with the arrival of the new administration and the hopes of new stimulus. “Biden said Monday that he had asked if the Senate could” fork “his agenda, so that impeachment and his agenda could be dealt with simultaneously.” Can we dedicate half a day to deal with impeachment and half a day for my people to be nominated and confirmed in the Senate? “Biden said as he received his second dose of the coronavirus vaccine. Incoming Senate Majority Leader Chuck Schumer , a Democrat from New York, said in an interview published Monday that it is possible to work on both issues at the same time. “We will have to multitask, but we must also move the agenda,” he told Buffalo News. , we have to do both. “Read: Why the stock market rallied even as a violent mob stormed the Capitol early Wednesday, stocks were rebounding, with the Dow Jones Industrial Average DJIA, -0.0 0% under pressure, while the Nasdaq Compsoite Index COMP, + 0.64% and the S&P 500 SPX Index, + 0.23% showing modest gains and not far from all-time highs. A successful impeachment in the House sets up a trial in the Senate, which would be historic because compared to Trump’s last impeachment on December 19, 2019, there is a growing view that there may be enough movement among Republicans to convict the president in the Senate. . However, the president is likely to step down when Biden is sworn in on January 20 before a trial begins, according to reports. Some have said the distraction from impeachment and possible Senate trial would come at a time when the focus should be on the distribution of COVID vaccines and sustaining the economic recovery from the pandemic. That said, some investors say they are hopeful that Biden can move forward with his plans and believe that the Trump chapter will come to an end in a week regardless of impeachment. “Given that the market has a good understanding of the building blocks of Biden’s management at the moment, politics is likely not taking center stage right now, at least as far as the market is concerned,” said Chris Larkin, managing director. of trading and investment products E-TRADE Financial informed MarketWatch by email. “Keep in mind that we are heading into a season of results where expectations are high. Businesses have shown that they can drive revenue and growth with lower cost structures due to low borrowing costs, remote working, and reduced travel, so traders are probably watching the numbers more closely than they are. what’s happening in Washington, ”he said. “The stock market only cares about the direction of the economy, earnings, interest rates, and Fed actions,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group, in comments emailed to MarketWatch. . The two previous political trials in which market reaction can be traced, including Trump’s, have not resulted in major movements in stock prices, according to Dow Jones Market Data. Trump’s impeachment in 2019, alleging abuse of power and obstruction of Congress, saw the stock market end the day virtually unchanged. Bill Clinton was indicted by the House in 1998, alleging obstruction of justice and perjury, linked to the testimony. Markets back then ended sharply higher the day after his impeachment.

Dow Jones market data

So far, no impeachment trials have led to the Senate conviction and removal of a president from office in the history of the United States. However, forcing Trump to leave office might not be the most important goal. Trump has indicated that he could run for president again in 2024, a prospect that many Democrats fear and that a growing number of Republicans would also like to avoid. If Trump is impeached again by the House and convicted by the required two-thirds supermajority in the Senate, senators could also vote to disqualify him from future federal office, which would only require a simple majority. —Rob Schroeder contributed to this article