As the eyes of the world move from trade to the Trump impeachment proceedings, the Dow Jones was quiet yet again. The index rose a handful of points to position itself to close at record highs for a third straight day.
Economists at Nordea Research believe that a recession is the only outcome where Republicans would consider ousting the president, barring any new bombshell.
A mixed day in the Dow 30 saw Boeing surge, while losses in smaller stocks negated its move.
Shortly after 3 pm ET, the Dow had gained 26 points or 0.09% to tick up to 28,293.16. The S&P 500 (+0.1%) and Nasdaq (+0.25%) also prepared to close at record highs.
The paralysis on Wall Street also translated into a calm day of trade in commodity markets. The price of gold dipped 0.08%, in line with the moderate gains in the Dow. Crude oil was able to rise 0.07%, while the price of bitcoin recovered back within striking distance of the $7,000 handle.
Congress began its marathon impeachment debate today, the culmination of which is virtually assured to see Donald Trump impeached by the Democrat-controlled House.
The Dow is well priced for this outcome, and traders are extremely confident that the Republican-controlled Senate is not going to remove a party member with an election coming in 2020. The president doesn’t look too calm, however, as his most recent, all-caps tweet shows.
While impeachment proceedings are extremely unlikely to result in the removal of President Trump, that doesn’t mean that Wall Street isn’t bracing for any eventuality.
Economists at Nordea Research don’t anticipate that Trump will be convicted unless some new information comes out between now and his Senate hearing . Should something occur, Nordea sees it as a positive for the global stock market, stating,
If Trump is suddenly ousted, we will not be surprised to see a general trend with markets outside the US improving. This may lead to a weakening of the USD and generally calming European and perhaps also partly Chinese markets. We think that Trump will be on the ballot in November. But if the US economy moves closer to a recession before November, the Republicans will be more tempted to oust Trump.
A recession in 2020 appears unlikely. The odds stand at approximately 20% according to some economists , which would need to correspond with the even lower chance of Trump’s ousting. Such an unexpected occurrence would undoubtedly generate significant volatility in the Dow.
On an extremely mixed day in the Dow 30, there was an even balance of winners and losers keeping the index in a sideways range.
After a miserable week, the Dow Jones’ most heavily weighted stock, Boeing (NYSE: BA), found some positive momentum with a healthy 2.1% rally off the bottom of its medium-term trading range.
Apple (NYSE: AAPL) was also higher (+0.5%), possibly enjoying a rare collaboration with other tech giants Amazon and Google on home connectivity products.
Anchoring the Dow’s rally were losses in Travelers, Procter & Gamble, Walmart, and Verizon, who all posted losses around 1%.