$DIA, $SPY, $QQQ, $RUTX, $VXX
Though the House of Representatives voted to impeach President Trump Wednesday night, the stock market rose to new record highs in their 1st session after the news, boosted by trade progress and a US economy that continues to hold steady.
Large-cap indices renewed the Northside with more vim & vigor marking new highs again.
The S&P 400 mid-caps joined the rally with new highs of their own.
The Philly Fed showed no evidence of a rebound and no indication of having hit a bottom
Existing home sales have begun to drop as their median price has risen and the inventory has declined.
We saw some solid moves across the market as the large-caps did not appear to be extended. The good bases broke higher too.
- The Dow Jones Industrial Average and S&P 500 rose by 0.4% and 0.3%, respectively, both hitting new all-time record highs.
- Since House Speaker Nancy Pelosi announced the formal impeachment inquiry on September 24, the S&P 500 has risen 7.6%, while the Dow has risen by almost 5.5%.
- That’s led some to compare the current market rally to reflect the impeachment process of Bill Clinton, when stocks consistently moved higher, as opposed to Richard Nixon’s resignation, when the market crashed into recession.
- But in both historical cases, it was the economy that drove the market, not political news, experts say: The drop under Nixon was to be expected, given the terrible economic situation at the time, while under Clinton, the market rallied thanks to a strong economy.
- Comparisons to the rally that occurred during Clinton’s impeachment suggest that stocks could outperform throughout The Trump Impeachment process, as pointed out by the senior market analyst at Oanda. “Clinton, however, had much of his rally based on the dot-com bubble, while Trump has his based on massive stimulus from central banks globally,” he says.
- With the Senate widely expected to acquit President Trump, “there will be no change for the markets to consider,” says the chief investment officer at Independent Advisor Alliance. “As a result, we would expect the impeachment to not affect markets, which will instead continue to focus on the economy, trade and corporate earnings.”
We will see short-term market moves on a day-to-day basis, we believe the market will react as it has so far with little reaction.
The S&P 500 gained over 26% during Mr. Clinton’s impeachment process, while it fell 13% from the start of Nixon’s impeachment to his eventual resignation.
The House of Representatives voted in favor of 2 articles of impeachment against President Trump last Wednesday.
The 1st, for abuse of power, alleges that the President pressured Ukraine to investigate his political rival, former Vice President and 2020 Democratic candidate Joe Biden.
The 2nd article accuses President Trump of obstructing Congress by refusing to cooperate with the impeachment inquiry at all.
After US House Speaker Pelosi (D-CA) announced the impeachment proceedings in September, numerous witnesses gave testimony in both closed-door and public hearings, which concluded in late November. With the House vote in favor of impeachment last Wednesday, the process moves to the Senate, which is expected to hold a trial in January.
Notably neither article is a high crime or misdemeanor, and Democrats efforts will fail in the Senate, if it even gets there.
Have a Happy Holiday Week