What would happen to trading in the UK and shares on the London Stock Exchange if President Donald Trump was impeached? There’s a 60% chance he will – odds of 4-6 according to Paddy Power Betfair.
The accusations against Trump are many:
- The alleged Russian ties and their influence on the US election result in November
- The crass tweets
- The Charlottesville, Virginia, white supremacist rally weekend that turned bloody (and was fatal for counter-protestor Heather Heyer), followed by Trump’s softball response
But the bottom line is that there must be solid evidence of misconduct for an impeachment. An impeachment process would have other hurdles, including that a member of the Republican-controlled House of Representatives called for an impeachment resolution.
Impeachment – what chance?
Jonathan Roy, advisory investment manager at London-based Charles Hanover Investments, thinks there’s a slim chance of impeachment, or it affecting trading in the UK.
“But it changes. You get these spikes. But what you see happening to Trump is on the scale of the Bill Clinton ramifications,” he says. Roy makes the point that though Mike Pence appears a far more stable personality, the big Trump infrastructure, tax and deregulation promises – and they are mostly promises after eight months into his term – “would only happen under Trump”.
Laith Khalaf, senior analyst at asset manager Hargreaves Lansdown, says an impeachment would be a ‘negative’ for markets because of the political hand-wringing. Trading in the UK would be bound up in that.
“This would probably particularly be the case for Donald Trump whose presidency has seen a rise in share prices on expectations of a spending splurge and business-friendly government policy.”
He goes on: “History tells us that politics can cause temporary shock waves in the market, but in the long term economic fundamentals assert themselves.”
Shades of Kristallnacht – Congressman Cohen
US Memphis Democrat Steve Cohen says he will file articles of impeachment against Trump. “When I watched the videos from the protests in Charlottesville, it reminded me of the videos I’ve seen of Kristallnacht in 1938 in Nazi Germany.”
He went on: “It appeared that the Charlottesville protesters were chanting ‘Jews will not replace us’ and ‘blood and soil’, an infamous Nazi slogan, as they marched with torches that conjured up images of Klan rallies. None of the marchers spewing such verbiage could be considered ‘very fine people’ as the President suggested.”
Others, including members of the financial community, have queued up to take aim. Despite all the pro-business talk, Trump’s behaviour is more akin to promoting “white nationalism” rather than supporting economic growth, Roger McNamee from venture capital firm Elevation Partners said recently.
"He [Trump] has pretended like he's contributed a lot to job growth when, in fact, he has not," McNamee told CNBC’s Squawk Box. "I think he threatens a lot of people. I don't see how any of that is pro-business at all.”
Impeachment is priced in
Back in mid-May, just four months into Trump’s term, Boris Schlossberg, foreign exchange managing director of BK Asset Management, told CNBC that the US stock market already assumed Trump would be impeached.