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<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The news adds another item to the list of & nbsp ;uncertainties investors will have to worry. So, what does this mean for actions? "Data-reactid =" 16 "> The news adds an additional element to the list of uncertainties that investors will have to worry about .What does this mean for equities?
"For actions, remember that we've seen something like this twice before and we've had two very different results," Neil Dutta from Renaissance Macro said in an email. "During the [President Richard] In the Nixon saga, stocks were already plummeting (of course, we were entering a recession) and continued to fall after the start of the formal survey process. During the [President Bill] Clinton's destitution process, the markets exploded upward when the economy exploded. "
"Maybe these political events are finally overwhelmed by the fundamentals?", S & D is questioned Dutta.
On the one hand, the size of the historical sample is very small. On the other hand, you could argue that no president is more powerful than the pistons that fuel the economy.
Citi Private Bank's strategists released the annotated cards above in a note to clients stating that "the US stock market was in line with the fundamentals of the moment". (Citi Private Bank)
The Nixon experience is remarkable because the actions have plunged unequivocally. However, as John Normand, a member of JPMorgan, noted in a note to clients in August 2018: "It was an extraordinary time, however, with or without domestic policy. The Bretton Woods fixed exchange rate system was disintegrating due to US balance of payments stress and Nixon's decision to suspend the convertibility of the dollar into gold – and devalue the currency – in 1971. Hence the irregular fluctuations of the dollar and the rise of the gold period. The first oil shock of late 1973 resulted in both a recession and rising inflation in 1974, and therefore a massive selloff of stocks and bonds based on stagflation. "
In other words, other forces have moved the markets.
The Clinton experiment is also interesting because the stock market was criticized before the impeachment process, as noted by Normand, "because of the trauma of the Asian crisis, the Russian default and the collapse of LTCM in previous months" . From there, investors were too busy the dot-com boom to be distracted by the turmoil in DC
<p class = "canvas-atom-text-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In conclusion, each instance was very different and it is probably cautious to say & nbsp;this time it is different.& nbsp; But what is clear is that over time, the stock market ended up reflecting what was happening in the economy, not the White House. "data-reactid =" 34 "> It follows that each instance was very different and probably We can certainly say that this time is different, but it is clear that over time, the stock market has finally reflected what is happening in the economy, not the White House.
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