Last updated: 08:49 / Tuesday, 24 December 2019
Column by Williams Mugwagwa

How President Trump Impeachment Has Affected The Stock Market

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Donald J. Trump, the 45th President of the United States of America, was officially impeached on December 18.

He was accused of pressuring Ukraine President Volodymyr Zelensky to investigate Democrat's Joe Biden and his son, Hunter.

Trump also wanted Zelensky to launch an investigation in which Ukraine, not Russia, would be fingered in interfering in the U.S. 2016 presidential election.

In return, President Trump would approve $400 million in military aid to Ukraine, which the small European country needed at the time.

The allegations of abuse of power by the President were brought forward by a whistleblower.

The impeachment process started on September 24, 2019, and concluded on December 18 with Trump's impeachment.

Trump will be tried in by the Senate where his own party, the Republicans, are in control. He is unlikely to be removed from office. The voting so far has been on partisan lines. The President is demanding an immediate trial.

Trump is the third President in America's history to be impeached. The other two before him are Andrew Jonhson in 1968 and Bill Clinton in 1998.

But how will Trump's impeachment affect the stock market? Trump has on numerous occasions, measured the success of his presidency based on stock market performance.

Trump's impeachment and the stock market

The stock market has not given attention to Trump's impeachment. The S&P 500 - a stock market index that monitors the performance of the largest 500 companies listed on U.S. stock exchanges - was up 7 percent between the start of the impeachment process in September and Trump's censure in December.

The S&P 500 was fluctuating positively as a result of a trade deal that Trump brokered with China.

Trump launched a trade war with China since coming into power. This has affected the stock market for some time. The possibility of an amicable deal is good news for investors.

During the early days of the impeachment process, President Trump warned that impeaching him would crash the stock market.

“If they actually did this the markets would crash. Do you think it was luck that got us to be the best Stock Market and Economy in our history? It wasn’t," said Trump.

He further warned that his impeachment would leave "everyone poor."

Clinton is the only U.S. president to be impeached in modern history. His impeachment in the late 1990s did not deter the stock market from climbing high.

In the case of President Richard Nixon who resigned in August 1974 before facing impeachment and removal from office, the stock market tumbled.

There is no yardstick or relevant history to predict how Trump's impeachment affects the stock market.

However, the current trends show that the stock market might perform well after all. As was the case with Clinton's impeachment.

For some reason, Trump's impeachment may have failed to have an impact on the stock market because investors didn't think it would change anything.

President Trump is still in office and will continue to behave as he has been doing since taking the oath of office on January 20, 2017.

Is it time to turn to safe-haven assets?

Investors turn to proven safe-haven assets in times of political instability. Trump's impeachment is far from that.

But for novice investors, it could be a scare. Reading a good investing guide for beginners should calm their nerves

The true impact of Trump's impeachment on the stock market will be seen in the coming days. But it will unlikely wield any results different from what we have seen so far.

Trump's presidency is nothing but a roller-coaster. And markets will fluctuate accordingly.

Column by Williams Mugwagwa

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