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Impeach Trump? Here’s What the Market Says…

Impeach Trump? Here’s What the Market Says…
May 19
12:37 2017

That was the sentiment from the finance crew on Twitter before the latest wrinkle appeared last night in the firing of FBI Director James Comey.

More on this political house of horrors and the market’s reaction in just a minute. But before we dive headfirst into the swamp, you need to see just how quiet stocks have become – and where they could go from here if political turmoil strikes.

My friend and market technician Charlie Bilello noted yesterday that the S&P 500 has moved within a range of 1.02% over the past 15 trading days. That’s the least volatile 15 days in market history!

How did we end up stuck in the summer doldrums? It’s not even June…

The major averages have flat-lined. Volatility has all but disappeared. The market’s unofficial fear gauge, the VIX, cratered to historically low levels earlier this month. It’s official: investors are bored silly.

Sure, the current political climate has everyone on edge. But none of Washington’s nonsense has injected any anxiety into the markets.

“The stasis should be unsurprising for those watching the equity market over the past few weeks,” Business Insider notes. “In the absence of any major geopolitical shocks or economic surprises, investors haven’t seen much of a reason to get riled up.”

Until now…

Last night, we learned Trump asked FBI Director James Comey to drop the Michael Flynn investigation. Sources told the New York Times they saw a memo that documented the meeting with the president where he explicitly told Comey to back off.

Unlike a handful of other recent Trump scandals, the Comey memo appears to have rattled investors. At least temporarily.

Dow futures dropped more than 100 points last night. Meanwhile, gold spiked. While stock futures have trimmed some of their losses, gold is up $10 early this morning. The VIX is also starting to wake from its slumber, bouncing off its historic lows to levels we haven’t seen since April.

Facebook, Twitter, and the media are full of outrage these days. It’s almost impossible to distinguish real scandals from short-lived news stories that turn out to be nothing of consequence hours after hitting the wire. Comey and “Memo-Gate” aren’t any different.

But some folks are starting to guess that one of these scandals will stick. Bets on Trump’s impeachment by the end of the year started to tick higher on Predictit.org last night…

https://dailyreckoning.com/impeach-trump-heres-market-says/

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