Markets dismiss Trump impeachment – but monitor China trade relations, coronavirus
The bullish financial markets are indifferent to the Trump impeachment trial – more concerning is the U.S.-China trade deal and the coronavirus, according to the CEO of one of the world’s largest independent financial services and advisory organisations.
The comments from deVere Group chief executive, Nigel Green, come as U.S. President Donald Trump’s historic impeachment trial got underway on Tuesday in the Senate, with Democrats calling for his removal from office and Republicans determined to have him acquitted.
“A major geopolitical event such as the impeachment trial of a U.S. President would, typically, send shock waves through financial markets,” Green said.
“This has not been the case here. The seemingly relentlessly bullish markets have largely shown indifference to the impeachment process.
“This is because investors see the likelihood of Trump being removed from the White House following a Senate trial as almost zero.”
He continued: “However, what is far more likely to cause market jitters in the coming weeks are vulnerable trade relations between the U.S. and China, the world’s two largest economies.
“U.S.-China phase one deal has stopped additional tariffs being imposed on each other’s goods.
“However, it does not address serious structural issues of trade between two vastly different economies, one which has enormous state capacity.
“In addition, the sheer number of goods – amounting to $200bn –that China will need to buy from the U.S. could, ultimately, make the deal unworkable. The hard part is negotiations yet to come.”
Green added that mMarkets will also be weighing concerns regarding the spread of the coronavirus that has afflicted hundreds in China so far – as hundreds of millions prepare to travel during the Lunar New Year period, the largest annual human migration on Earth.
The deVere CEO concluded: “This bull market isn’t bothered about Trump’s impeachment trial. It will be closely monitoring other major issues, including the U.S.-China trade dispute – the far-reaching impact of which is likely to outlive Trump’s presidency.”