The economic fundamentals have taken a backseat to headlines for much of the year, much more than has historically been the case.
Trade headlines helped drive shares higher earlier in the year.
- The pullbacks in May and August occurred amid an escalation in tensions.
- June/July’s rally occurred amid more positive trade headlines.
- Economic concerns linger, but more recent action has been influenced by headlines.
The unemployment rate fell to a 50-year low in September, dropping 0.2% to 3.5% per the U.S. BLS. It ties the low last reached in December 1969. It seemed appropriate to lead off with a graphic that highlights the history going back to 1950.
We’ve had two instances in the modern era when a president was threatened with impeachment or was impeached—President Nixon (1974) and President Clinton (1998).
- We were grappling with a significant bear market during Nixon’s second term, while stocks performed well during Clinton’s impeachment (St. Louis Federal Reserve data).
Why the contrast?
Political drama in the nation’s capital hit a fevered pitch last week, as House Speaker Pelosi announced a formal impeachment inquiry of President Trump. You know I don’t make a habit of staking out political positions in my weekly articles.