Democrats handed down what they called a “historic” rebuke of President Donald Trump this week, but you wouldn’t be able to tell from the stock market.
Stock market investors aren’t panicking over impeachment — to the contrary, indexes reached all-time highs on Thursday, the Washington Examiner reported. Experts think that investors aren’t concerned about the political theater, and they could be feeling encouraged by the passage of the U.S.–Mexico–Canada (USMCA) trade deal.
Impeachment doesn’t register in stocks
House Democrats voted to impeach Donald Trump on Wednesday evening after a marathon debate that Democrats and members of the media called “solemn” and serious — but markets didn’t seem to register the so-called profundity of the event.
Investors could hardly be blamed for shrugging when Speaker Nancy Pelosi (D-CA) backtracked literally the next day — saying she would not commit to sending articles of impeachment to the Senate, according to the New York Post — and shifted her tone from “solemn” to buoyant, saying there was a “spring” in people’s steps.
If and when the Republican-controlled Senate takes over, Trump’s acquittal is the expected outcome anyway — and investors are holding to that prediction. The stock market seemed to reflect Trump’s political fortunes Thursday afternoon when the Dow Jones Industrial Average, S&P 500, and NASDAQ Composite finished at all-time highs.
They’re more worried about tangibles like profits, not the vacuous political theater playing out on the Capitol, financial experts say. Trump’s new trade deal could boost the GDP by billions of dollars, which could help explain some of the bullishness, the Examiner noted.
“I think the more important thing is policy, and what’s going on in the interest rate differentials. I just don’t see how the substance has relevance for foreign exchange,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. “Unless you think Trump is going to be removed, it’s American political noise.”
Investors bullish on Trump’s re-election
In a jarring display of bi-partisanship, Congress capped off impeachment week with a successful vote in the House to pass the USMCA, Trump’s long-sought update of NAFTA. The president is homing in on a trade deal with China as well, but the market may also be in a bullish mood because of Trump’s re-election prospects, which investors seem to think are looking pretty good.
Wall Street is wary of Sen. Elizabeth Warren (D-MA), but former Vice President Joe Biden is still the Democrat frontrunner and there is a feeling that a failed impeachment will only embolden Republicans while making Trump more sympathetic to independents. A survey of investors found that 74 percent view Trump’s acquittal as a neutral scenario, compared with 69 percent who felt that Trump’s resignation would hurt stocks, according to MarketWatch.
The mood of the market seems to reflect a mood of anti-climax registering nationwide: after months of build-up and three years of “resistance” before that, impeachment has peaked, and it can only get worse for Democrats from here on out.
Senate Majority Leader Mitch McConnell (R-KY) is calling Pelosi’s bluff, saying that she’s too afraid to send articles of impeachment to the Senate — and the Democrats’ star professor witness Noah Feldman said that impeachment doesn’t count until Pelosi moves forward.
This should have been the worst week of Donald Trump’s presidency, but it ended up being a very good one indeed.