Will The Impeachment Hearing Effect the Markets?

This is a good question.  Markets don’t like uncertainty and investors have a tendency to pull back when there is doubt. Oddly enough, when Trump tweeted he would be releasing the transcript of his phone call with the President of Ukraine, the stock market jumped up a little bit. This was followed by a sizeable sell-off.  Markets are rebounding today.

We’ve only had three impeachments proceedings in America history: Jackson, Nixon and Clinton.  Only two of these are in an era of modern financial markets.  Nixon’s impeachment, from October 1973 to January 1974, saw a significant decline.  It’s worth noting that the event coincided with a recession and a 235% jump in oil prices.  During the Clinton impeachment hearings, the equity markets were experiencing a strong bull market and stocks rose. (Sources: Bloomberg, CIM)

So is an impeachment hearing the only factor we look at?

Since January 2018, the US markets have experienced volatile sideway moves. There is talk of a looming recession and we are seeing a stall in global markets.  I will be watching to see if the hearings affect pressing matters with China and Iran.  If trade negotiations with China stall and tariffs persist, consumers will be paying more for goods. If tensions with Iran escalate, we may be paying higher prices at the gas pump.  Neither can be good for a precarious economy.

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