In New York City on Friday the Dow Jones Industrial Average soared to 28,004, a new record. In fact all major U.S. stock indexes hit new highs, and the SNP 500 hit its longest streak of weekly gains in two years. Put simply, it was a really good day for the economy.
Meanwhile in Washington, the public phase of the House impeachment inquiry slogged along, with Democrats all but conceding that even if they vote to impeach, the removal of the president by the Senate is all but certainly not going to happen.
Are these two major events on the Acela corridor related? It’s difficult to say, but some experts feared impeachment and removal could put a serious strain on the market. Asked last month by CNN if he believed impeachment could crash the market, former Goldman Sachs CEO Lloyd Blankfein said that it could, essentially arguing that markets don’t like that kind of political disruption.
So why hasn’t the impeachment inquiry spooked the market? Joseph Brusuelas, chief economist at the audit and tax firm RSM, said he does not believe impeachment has any material impact on the markets or economy.
“Given where the public is and the small probability of conviction in the Senate, there is at this time little risk to the outlook…If there should be a major shift in public opinion and the opinion of potential jurors in the U.S. Senate, that is where economists, financial professionals and market actors would first look for stress,” he said.
David Kotok, Chief Investment Office at investment advisory firm Cumberland, stressed a similar point, saying, “The markets see the impeachment process as a pure political ploy. So the metaphor is Clinton, not Nixon. Hence no market reaction to impeachment proceedings. So far, this is not a Nixon type story. If evidence surfaces to a smoking gun level like the Nixon 18 ½ minute gap in a tape, then things change.”
There are few things telling about this situation. First, it is yet another indicator that experts in myriad fields believe the Trump presidency will survive. Democrats, and progressives in the media are now claiming they always knew the Senate would never convict, but only a few weeks ago they were waxing poetic about how televised hearings would sway public opinion and pry loose enough GOP senators to sink Trump.
This is also an indicator that the Trump economy continues to chug along creating jobs and growth. The market’s sigh of relief and record highs as the fear of possible removal of Trump subsided show that investors are comfortable with Trump in the White House, and still feel rather bullish.
As hard as they tried, House Democrats were not able to pull off the potent impeachment effort that experts had feared would tank Wall Street. Instead, as their public hearings plod along the stock market is soaring and America is going about its business.
David Marcus is the Federalist’s New York Correspondent. Follow him on Twitter, @BlueBoxDave.
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