Your Presidential Impeachment Portfolio
The democrats believe they have a precedent for impeaching the President. In July, he allegedly connived with other world leaders to get dirt on Joe Biden, his election rival-to-be. He’s put his fingers in his ears, but democratic challengers are now burning the midnight oil to stack up evidence against him. They want Trump out by Thanksgiving!
Will the President be impeached by the House of Representatives? Probably, yes. Will the President then play a ‘get out of jail free’ card in the Senate, having all the charges defeated and remaining in office? Probably, yes.
All this must be déjà vu for investors who played the markets in 1973 and 1998. First, President Nixon was dragged before a court. Sadly for him, he didn’t have Senate friends to bail him out of Watergate. He walked! However, the economy was already halfway down the tubes at that point, stocks being “reduced to clear” due to economic factors such as the oil boom, rather than political dramas.
20-odd years later, Bill Clinton “did not have sexual relations with that woman, Monica Lewinski.” He was also impeached but survived a Senate vote by the skin of his teeth. Stocks were all over the place back then. Investors briefly went “risk-off,” buying up bonds and gold, but then celebrated his Senate , sold their golden bars, and pushed on from there.
So, the President isn’t crucial to markets, which will accept even the most business-bashing nominee so long as they promise stability. However, investors have never seen a White House resident get booted out of office during a bull run like this, especially with a trade war thrown into the mix! Expect volatility, but never bet against the USA. It still has the special sauce!