The Effect Of Politics On The Stock And Capital Markets blog post

The Effect Of Politics On The Stock And Capital Markets

Trading stock and capital can be a very lucrative industry if you’re fully aware of what to expect from the market. Despite being a novice trader, other factors can have an impact on successfully trading and gaining/maintaining a profit. For many traders, politics can cause a shift in their trading decisions. Consequently, what’s going on in the political arena can cause the stock and capital market to rise or plummet. Discover the current effect of politics on the stock and capital market by reading more details below.

The Effect of Politics on Trading in The Stock And Capital Markets

US President Trump And The Trade Industry

With Wall Street being predominantly concerned with corporate profits and the economy, how could impeaching Trump impact the market? According to chief investment officer at the investment advisory firm Cresset Wealth, Jack Ablin, “the president doesn’t control the stock market, so he probably shouldn’t take any credit or blame.” Pres. Trump has been very vocal about getting the credit when the stock and capital markets are doing well, making inaccurate predictions about the industry, and looking for someone to blame when the market is struggling. Pres. Trump tweeted; “the stock market would crash if he’s impeached,” pointing out the impact he expects his supporters to have on the market if he’s impeached. In fact, stocks hit session lows when House Speaker, Nancy Pelosi announced an official impeachment inquiry.

Past Political Impacts On The Stock And Capital Market

The experts suggest taking a look at past impeachments to see how impeaching Pres. Trump could have a political impact on the stock and capital markets. In fact, it was not the impeachment inquiry and resignation of Richard Nixon in the 70’s that had a political impact on the stock market, but rather, the fall of the Bretton Woods international currency exchange system. Clinton’s impeachment inquiry and acquittal in the 90’s had a reverse impact on the stock and capital market with an increase of 28 percent from his impeachment inquiry to acquittal.

The Political Effect Of Oil Prices On The Trade Industry

Crude oil has reported its largest one week gain since the drone attack on Saudi Arabia. However, military action could trigger a period of elevated oil prices around the world which could have a political impact on the trade industry. The stock market appears to rise when Saudi Arabia had more than half of its production capacity cut off. When gas prices rise it rattles the trade industry and investors are less likely to invest while businesses are forced to pay higher prices for gasoline. Oil prices seem to have a greater indirect impact on the stock market when political issues are involved.

Elections have long since been viewed as volatile political grounds that create uncertainty for many traders. Political events have a large impact on the trade market because they can impact the currency of nations around the world. With a trillion foreign exchange transactions every day, new leadership can change the ideology of the people and affect the trade industry. Luckily, the forex market continues to be the largest and most active financial market in the world.

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