Weekly Market Commentary

Last week, a whistleblower complaint reverberated through Washington and culminated in an impeachment inquiry of the President.  Surprisingly, market reaction was relatively muted to the news. Politics aside, it’s important to understand the potential implications of impeachment proceedings on the markets.  It does not yet appear that the proceedings will alter the outcome or timing of the US-China trade deal.  President Trump and Chinese President Xi are scheduled to meet in Chile from Nov. 16-17.  If for any reason that meeting does not happen, the chances of some sort of trade deal or truce being reached before year-end become slim. The U.S. Mexico Canada Agreement (USMCA) is still awaiting ratification in Congress and the added complication of impeachment proceedings certainly does not seem likely to expedite the deal. Finally, there was some enthusiasm around a bipartisan deal regarding healthcare/drug pricing following the August Congressional recess.  The proceedings around impeachment will likely delay any progress in this area until there is more clarity.  Ultimately, we look back to 1998 for a similar situation—the bar to impeach is relatively low, but actually removing a president through impeachment has never occurred in US history.

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