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Trump has now gone down in history as the third American president to ever be impeached. Even though he runs the risk of removal, the stock market and investors aren’t bothered.
On the 24th of September, the Speaker of the United States House of Representatives announced an official impeachment inquiry opened against sitting President Donald Trump. The issues against him ranged from obstructing Congress to some foul play in his recent dealings with the president of Ukraine, Volodymyr Zelensky. Even though Trump is yet to be removed from office, the president has now been impeached by the House and reactions have begun to pour in. Interestingly the stock market has not suffered from the negative announcements and is swelling regardless.
Yesterday, Nasdaq Composite climbed 0.53% to 8,873.87 and has further shot up to 8,887.22 at the time of writing. So far, the Nasdaq Composite has hit five consecutive records cementing the longest achievement run since January last year. The Dow Jones Industrial Average, as well as the S&P 500, have both seen similar gains as they’ve climbed 0.49% to 28,276.96 and 0.45% to 3,205.37 respectively.
Bitcoin also wasn’t left behind as on Wednesday, it increased by more than 10 percent, ensuring its largest 24-hour jump since late October.
Why Is the Market Unaffected?
Somehow, investors have largely ignored the political scenery even though it has some chance of affecting the market. Since the impeachment proceedings were announced, the S&P 500 has gained 5% and is still on track to gain more. Cresset Wealth Advisors Chief Investment Officer Jack Ablin said investors are unmoved because they don’t really think Trump will be removed.
“Investors have virtually ignored what’s going on in Congress. They care about the economy. They care about profits. They care about trade, and if they thought the president was in serious jeopardy of losing his job, they’d care.”
Even though the president has been impeached, he will remain in office until 67% of the Senate vote to kick him out. However, it is widely believed that since the Senate is mostly Republican, Trump is not in any real danger.
If investors are showing any concern at all for the impeachment, it’s because the proceedings show that there isn’t a lot of cohesion in American politics. Bannockburn Global Forex Chief Market Strategist Marc Chandler says:
“It’s not going to affect monetary policy or fiscal policy, and people think it’s not going to happen. It’s more of an embarrassment. In the first 100 years, they only tried to impeach Johnson. It’s what it means for American politics.”
Chandler further said that the entire event has no “relevance for foreign exchange” and “unless you think Trump is going to be removed, it’s American political noise.”
There’s also some history to support investors’ somewhat lackadaisical attitude to the impeachment. Trump is only the third president to be impeached in all of American history after Bill Clinton in 1998 and Andrew Johnson in 1868. Even though impeachment proceedings apparently don’t happen that often, history suggests that investors have next to nothing to worry about as the stock market didn’t suffer from previous occurrences.