If you look at Donald Trump’s tweets, it would seem that he single-handedly caused the US stock market to rise, but it seems unlikely he will take the blame if it falls.
Presidents Have an Indirect Effect on the Stock Market
That is the nature of the US stock market and the US presidents. Presidents tend to get the blame if stocks go down, but rarely get credit for a rising market.
Presidents themselves don’t directly influence the market. What affects the market are their policies, agendas and political appointments.
The market is particularly sensitive to the fiscal agenda of trade policies, appointments like the Treasury and Commerce secretaries, trade representatives and economic advisors.
These influence economic dynamics, which then influence investor sentiment, then the market gets affected.
One thing that would seem likely to cause investor nervousness is the impeachment of a president and the uncertainty and lack of stability that an impeachment represents.
This does not seem to be the case with Trump. His presidency has already generated uncertainty from his unorthodox leadership that usually would have wreaked havoc on the market.
Trump’s Impeachment Has Had Little Effect the US Stock Market
There seems to be one thing that investors are sure of – that while Trump is impeached, Trump will not be removed from office, thanks to the partisanship of the current US Senate, and so there won’t be the disruption that a removal from office would cause.
The political issue that investors are interested in is the trade war with China, not impeachment.
What Investors and the Market Care About
It would seem that investors care more about the economy than they do about what happens in Congress. What they care about is profits and trade.
What the investors are focussing on instead of impeachment are the more positive aspects of what has been developing – like the trade agreement with China, the budget accord and the trade deal with Canada and Mexico, though they both were accomplished in part because they got bipartisan support, and the White House supported the budget bills because they avoided a government shutdown.
The Link Between Stock Market, Economy and Consumer Confidence
A rising stock market tends to go hand in hand with a growing economy, which in turn leads to greater investor confidence, and thus more investment into the market.
Consumer confidence impacts their economic decisions, like how they will spend. Consumer confidence is one of the strongest indicators of what shape the economy is in.
Politics Has More Effect on Consumers Than on the Stock Market
According to one survey, only 21% of Americans say they are worse off economically today than in 2016. There is an historic low in unemployment, high consumer spending and a record stock market.
The political difference is that 42% of Republicans say they vote on economic issues, while 27% of Democrats cite the economy as their main issue.
One thing is for sure. Regardless of political affiliation, economic conditions are so good that most Americans have some consumer confidence.