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— This is the script of CNBC's news report for China's CCTV on September 26, 2019, Thursday.
The Trump impeachment investigation was supposed to be bad news to U.S. financial market, because there are uncertainties.
So we saw a big drop in recent one month on Tuesday, however, it clawed back gains soon Wednesday, that is mainly because currently the market doesn't see a great possibility of passing that impeachment after Trump said he will public the call content with Ukraine President and senators from both House of Representatives and Senates cleared their position.
We have to know the procedure of impeaching a president to understand that point. First, House of Representatives initiates the impeachment, if the impeachment investigation said president did something illegal, then this is an impeachment introduction against the president, the introduction would delivered to the senate to review after it passed the simple majority, at this stage, the senate will have trials first, if 2/3 vote for approval, then the impeachment is completed.
The house of representatives is dominated by Democrats, while the senate is dominated by Trump's Republican. So even though this impeachment is passed in the House of Representative, there is less chance that it will be passed in the Senate. According to CNN, of the 235 democratic seats in the house, about 20 have not publicly supported impeachment. In U.S., the impeachment usually takes a long time, now it just begins and it's far from the key stage, so some believe that investors have not taken it seriously, more of them still wait and see.
Some Wall Street strategists figure that Trump's situation is similar to Clinton, whose impeachment was passed in the House of Representatives but rejected in Senates.
From the Lewinsky affair published in Jan 1998 to Clinton acquitted in Senate in Fed 1999, S&P500 gained 28%.
So analysts believe, initiating impeachment against Trump may not fundamentally shake the original trend of financial markets, but in the meantime, the release of relevant information from the investigation will inevitably cause market fluctuations.
According to Morgan Stanley's analysis team, the impeachment may bring impact to many aspects, including U.S.-China trade relations, U.S.-Iran relations, and the 2020 presidential and senate elections, these are key indicators to the next step of the financial market. What' else, it's notable that the current market's performance and expectation are made based on what we've learned yet, once there is any incontrovertible evidence of guilt, then would be another situation.