Will an impeachment inquiry impact US-China trade talks, stocks or the economy?
U.S. stocks are close to reclaiming record levels, the unemployment rate is hovering at 3.7 percent, a 50-year low and a trade deal with China hangs in the balance.
Now a formal impeachment inquiry, announced by Democratic House Speaker Nancy Pelosi late Tuesday, could threaten all of the above.
“It certainly could hurt the economy if it pushes out China's willingness to negotiate on hopes that they'll get a softer deal from someone else” Stephen Guilfoyle, President at Sarge986 LLC, tells FOX Business.
U.S. negotiators, smack in the middle of trade talks, are keeping the pressure on the Chinese heading into a fresh round of talks set for October.
“The President is determined that we have a fair and reciprocal relationship with trade and it's been a one-way street,” said Treasury Secretary Steven Mnuchin during an interview with Lou Dobbs on Monday.
While the impeachment inquiry may drag out U.S.-China trade talks, Paul Dietrich, CEO of Fairfax Global Markets, says any impact to the U.S. economy is likely nil. “No effect on the underlying economy,” he told FOX Business, adding that people will continue to shop and work despite the inquiry.
As for the President, he expressed frustration with the move while speaking to reporters at the United Nations.
“We have the strongest country in the world, the best economy we’ve ever had and she’s talking impeachment,” he said while also lashing out with a tweet: ‘PRESIDENTIAL HARRASSMENT’
As for the stock market, volatility kicked-up with stocks falling across the board as word of the inquiry became public.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 37815.92 | -570.17 | -1.49% |
| SP500 | S&P 500 | 5035.69 | -80.48 | -1.57% |
| I:COMP | NASDAQ COMPOSITE INDEX | 15657.822311 | -325.26 | -2.04% |
While volatility may continue, history tells us impeachments, while few and far between, are not negative for equities.
During Bill Clinton's impeachment process U.S. stocks clocked big gains.