INSUBCONTINENT EXCLUSIVE:
The move by Democrats in the US Congress on Tuesday to launch a formal impeachment inquiry into President Donald Trump has caused
nervousness on Wall Street - but history suggests investors need not worry.
House of Representatives Speaker Nancy Pelosi announced the
probe over reports Trump sought foreign help to smear a political rival
The S-P 500 closed down 0.84 per cent, hurt partly by the anticipation of Pelosi’s announcement.
While the uncertainty created by the move
roiled the market, investors said the year-long US-China trade war and damage it could do to the global economy remained the most pressing
issues.
The removal of Trump, a Republican, from office appeared unlikely since it would require the Republican-controlled Senate to convict
him in a trial by a two-thirds majority.
“It’s not going to happen, where you have a Republican Senate convict a sitting Republican
president,” said BB-T Wealth Management Senior Vice President Bucky Hellwig, characterizing the 1998 impeachment of President Bill Clinton
as a “nothing burger.”
Wall Street dropped and the dollar tumbled in the months ahead of President Richard Nixon’s resignation in
1974, when he was under threat of impeachment over the Watergate scandal.
But that market volatility also stood against a backdrop of
Nixon’s decision to suspend the dollar’s convertibility into gold and a recession following the oil shock of late 1973, according to JP
Morgan’s John Normand.
After early volatility, Wall Street also weathered the 1998 impeachment of Clinton, who was later acquitted by the
Senate.
The S-P 500 tumbled 10 per cent in the 11 trading days leading up to Oct
8, 1998, when articles of impeachment for Clinton were sent to the House
But the index recouped those losses by Oct
21 and kept rising for the rest of 1998 to end the year up 27 per cent.