Today, the oil companies $PE and $CXO still having a bad day after oil prices fall further. Buy low, sell high. Time to buy more shares of these two companies. As for $GME , the stock is about 2% up. The two stocks contributing the most two my portfolio is $Dge.L and $JPM .
TRUMP IMPEACHMENT INQUIRY: How does this affect the STOCK MARKET and ECONOMY 🇺🇸
This week, House Speaker Nancy Pelosi initiated an impeachment inquiry on President Donald Trump and Wall Street doesn't seem to like that. First let's understand the whole situations. It all started in 2014 in Ukraine where there was a revolution and pro-Russian president Viktor Yanukovych was ousted out of power. A new president was elected, Petro Poroshenko who was later defeated in an election this year by now president Volodymyr Zelensky. Joe Biden, who was Vice President of the United States at the time, was greatly involved with the situation. If you read his book 'Promise me, Dad', you will see that President Barack Obama trusted him with foreign affairs. The problem is that his son, Hunter Biden was on the board of directors of a Ukrainian gas company, Burisma. There can be conflict of interest. Donald Trump sees Joe Biden as his main political opponent for the 2020 elections and he calls the new Ukranian president, Zelensky to dig dirt on Joe Biden. Now, this is an impeachable offense. I read the letter and the report from the whistleblower and it doesn't seem that impeachment is very likely especially with a Republican majority senate. Nevertheless this affects the stock market.
Tech stocks and healthcare stocks were the most affected. That's because most of the $SPX500 and other ETFs hold these tech companies. When there is a selloff, they get hit the most. Also, algorithmic trading triggers more selling. $AMZN was down by 3.7% and $FB by 2.7%. Healthcare was down because now Elizabeth Warren is the front-runner Democratic nominee for 2020 with $UNH losing 6.1% and $CVS 2.1%.
Let's look at the case of the impeachment of president Bill Clinton, who was later acquitted by the Senate, and president Richard Nixon who resigned just before impeachment. With the Clinton impeachment, there was a small drop in the stock market but eventually it recovered. It was in the middle of the dotcom bubble and it was as if nothing happened. With President Nixon, there was a market drop. Wall Street didn't like that. But if we look deeper we can see that there was a recession at the time and it was caused because of the Arab oil $OIL embargo after the Yom Kippur War. There was also high interest rates with the abolishment of the gold standard $GOLD and subsequent fear of the value of the US Dollar. What the stock market was reacting to were mainly these events.
Wall Street likes President Trump because of the tax cuts and limited regulations. Therefore, short-term, the stock market will not do great if Trump is impeached. As for the economy, the average consumer cares more about their own lives than all these political and market turmoil but all of this can lead to a recession and consumer confidence goes down.
Long-term, it doesn't matter. Even if Elizabeth Warren becomes president, the market will crash and she will be a one-term president. Socialism never works because you eventually run out of other people's money. If you look at Wells Fargo $WFC or JPMorgan Chase $JPM . These companies have gone through the Civil War, the great depression, the Glass-Steagal Act. But there are still here. A great company will always be a great company. It doesn't matter who is president Coca Cola $KO will still sell coke and Apple $AAPL will still sell iPhones. In the long-term, the economy and the stock market is bigger than any politician or any political party. What runs the economy are the people, the consumers.
Because of all that is happening, there's a lot of volatility in the stock market and it is time to take that as an opportunity to invest.
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