- Stocks went down after Nixon impeachment but up after Clinton’s.
- Secular long term trends are real drivers of stock market moves.
With Congress’s impeachment inquiry hearing kicking off today, we thought we would examine the possible effects a formal impeachment of President Donald Trump might have on the stock market.
The President tweeted that impeachment would cause the market to crash. Is there evidence for this view?
In fact, it turns out there is no evidence to believe this would be the case. In Casey Bond’s article for Huffpost, financial experts detail what happened during the last two Presidential impeachments.
In the year after President Richard Nixon’s impeachment in 1973, the stock market fell 34%. While serious, this down move was also concurrent with the Arab oil embargo, rising inflation, and the end of the Bretton Woods international currency agreement. These events contributed to a secular down trend and were the real causal factors for the move.
But between the start and finish of President Bill Clinton’s impeachment, the stock market actually rose 28%. During this period, the stock market was experiencing a secular bull market that lasted until the popping of the Dot Com bubble.
In short, there is no evidence that an impeachment of President Trump would necessarily result in a stock market crash. The market could just as easily move higher by the end of the impeachment process. The factors that really move the market are long term, fundamental trends within the US and around the world.