How did Nixon’s impeachment affect the stock market?
“On the surface, this suggests the impeachment had a major impact on stocks, but there were other major factors that had far more relevance for businesses and their stock prices,” said Jonathan Bird, a certified financial planner and owner of Farnam Financial. “Nixon’s impeachment at the time was the least of our concerns.”
What happened to the stock market when Andrew Johnson was impeached?
When Andrew Johnson was impeached in 1868, the stock market didn’t exist as it does today. Stocks were mostly made up of banks and railroad companies, according to Forbes, and only an elite group of investors was allowed to trade them. The Dow Jones Industrial Average wouldn’t be established until 16 years later.
What happened to the market during Bill Clinton’s impeachment?
We saw the opposite market reaction during President Bill Clinton’s impeachment proceedings, which began in 1998. He was impeached by the House, but the Senate acquitted him in 1999, allowing him to finish out his term. In the months preceding the release of independent counsel Kenneth Starr’s report to the House on Clinton, the S&P 500 fell 19.4%.
Who was the next US President to be impeached?
The next president to undergo impeachment proceedings was Richard Nixon. His impeachment inquiry was announced on Oct. 30, 1973, in response to his involvement in the Watergate scandal. Over the next month, the S&P 500 fell 11%. It tumbled 33.4% over the following year.
This is how the Nixon and Clinton impeachment dramas affected markets
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The market has shrugged off Trump's impeachment inquiry so far
Investors are more focused on the trade war with China, monetary policy and the economy.
Clinton's impeachment did not rattle the markets
The official inquiry began after the Russian debt crisis and near-collapse of Long-Term Capital Management hedge fund. The S&P 500 gained close to 27% between Clinton's impeachment inquiry and his acquittal.
Nixon's impeachment overlapped with dire market conditions
A recession combined with a bear market and the oil crisis led the S&P 500 sharply lower. It fell 26% between Nixon's impeachment inquiry and his resignation.
Why is the stock market forward looking?
The stock market tries to be forward-looking so investors can never be sure exactly what’s baked into the price of stocks. This is especially true over the short-term as investors have been known to both panic buy or panic sell when the volume gets turned up in the news.
Do politicians have more control over the economy?
Politicians and their partisan followers often like to think they have more control over the markets or the economy than they actually do. Markets don’t care nearly as much about politics or who the president is as most would assume.
What happened to the economy in 1973?
The economy was mired in recession as the Watergate scandal broke. (Source: FRED) Inflation, meanwhile, was running in the double-digits. Consumer prices rose 3.6% from the prior year in January 1973. One year later, inflation was running at 9.6% year-on-year; by November 1974, inflation was up 12% year-on-year.
What was the economic rate in 1973?
During this period, the economy was on its way into recession. After economic growth hit an annualized rate of 10.2% in the first quarter of 1973, economic growth rates hit -3.3% in the first quarter of 1974 as the economy entered a recession from which it did not emerge until the second quarter of 1975. The economy was mired in recession as the ...
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What was the price of oil in 1974?
Stagflation gripped the economy during 1974-75. (Source: FRED) Oil prices, meanwhile, rose from $3.56 a gallon in January 1973 to $10.11 a year later as OPEC members imposed an oil embargo against the U.S. in response to U.S. involvement in the Arab-Israeli War.
Who was followed by Nixon during the OPEC crisis?
The crisis was merely compounded by the fact that Nixon was followed by Ford, who did little to restore confidence, and then by Carter, who destroyed America’s credibility.
When did the S&P 500 peak?
The US stock market (basis S&P 500) also peaked during January 1973 at 120.24. As Watergate continued to grow in significance, the S&P 500 fell almost relentlessly with the exception of a 2 month rally during September/October 1973. The S&P 500 fell reaching its lowest monthly closing in September of 1974 following Richard Nixon’s resignation.
What happened in the 1980s?
Eventually, the stock market rallied going into 1980 during the Carter Crisis period when the bonds continued to fall to new record lows. Capital became concerned about government and a flight to quality began. This resulted in capital fleeing the bonds markets and moving directly into the share market. Gold & Watergate.
Why did gold outperform the S&P 500?
However, gold outperformed the S&P 500 due to the fact the dollar was declining sharply on world markets. Gold acted more as a hedge against the currency decline since it is a non-national commodity with international value.
What was the reaction of Gold and Watergate?
However, the legalization of gold for American ownership due in 1975 caused the rally to resume going into December 1974 on wild European speculation that had anticipated a huge demand from American citizens.
What was the low of August 1974?
From the 1972 high of 142.03, the August 1974 low was established at 86.29 during the week of the 26th. Following the resignation of President Nixon, the US bond market recovered moving higher going into the week of February 17th reaching the 99.31 level.
Johnson, Nixon, Clinton: Past Impeachments And The Effect On Stocks
When Andrew Johnson was impeached in 1868, the stock market didn’t exist as it does today. Stocks were mostly made up of banks and railroad companies, according to Forbes, and only an elite group of investors was allowed to trade them. The Dow Jones Industrial Average wouldn’t be established until 16 years later.
Ignore The Headlines
So what might we expect if Trump is impeached? Probably not a whole lot, according to Ric Edelman, a financial advisor, author, syndicated radio host and co-founder of Edelman Financial Engines.
