Markets react negatively to the talks of impeaching Trump

The Fed’s term and overnight repo operation were oversubscribed on Tuesday.  Dealers submitted $62B of securities for the 14-week $30B repo and $80.2B for the $75 O/N repo. ESZs gyrated in a wide range from the opening on Monday night until the eMini S&P 500 Index futures broke down minutes before the end of the first hour of trading amid impeaching Trump talk.

impeaching Trump

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This reason for the early decline was Trump’s comments on China at the UN General Assembly.

ABC News @ABC: Pres. Trump: "In 2001, China was admitted to the World Trade Organization. Our leaders then argued this decision would compel China to liberalize their economy and strengthen their protections. "This theory has been tested and proven completely wrong."  https://abcn.ws/2mTy8mp

"We're carefully monitoring the situation in Hong Kong," Pres. Trump says. "The world fully expects that the Chinese government will honor its binding treaty... How China chooses to handle the situation will say a great deal about its role in the world in the future."

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The Trump decline stalled at midday, a modest rally appeared until reports said Pelosi would make an announcement today on impeaching Trump.  ESZs and stocks tumbled on the report.

@ABC: Rep. John Lewis: "I truly believe the time to begin impeachment proceedings against this president has come. "To delay or to do otherwise would betray the foundation of our democracy."  http://abcn.ws/2mrJKfX

Impeaching Trump hurts markets

@GarrettVentry: Pelosi has no choice but to support impeachment because of her caucus — however polling shows it’s pretty much political suicide for Democrats to move forward with impeaching the President [Due to AOC and other leftists’ surprise victories in Dem primaries, Old Guard Dems fear losing their seats in a primary to younger leftists.]

Dow drops 200 points as Democrats talk Trump impeachment

https://www.cnbc.com/2019/09/24/stock-market-us-china-trade-talks-in-focus-on-wall-street.html

@VicToensing: Frightening. Dems want to impeach  @realDonaldTrump by relying solely on UNKNOWN INFO from an ANONYMOUS source who based the info on HEARSAY.  Do you ever want the Dems to be in charge of our Department of Justice?  Too bad they control House.

Pelosi Plans Formal Impeachment Inquiry of Trump

Faced with new allegations against President Trump and administration stonewalling, Democrats have ended months of caution…

https://www.nytimes.com/2019/09/24/us/politics/democrats-impeachment-trump.html?smid=tw-nytimes&smtyp=cur

Joe Biden will back impeaching Trump if the White House refuses to comply with congressional demands for information about his interactions with Ukraine’s president   http://bloom.bg/2kUSlro

@ArthurSchwartz: Biden Refuses to Answer, Walks away from Questions about Corruption in Ukraine https://twitter.com/ArthurSchwartz/status/1176581411970736128

As long as you have banana republic politics with the impeaching Trump talk, you need a banana republic central bank

Positive aspects of previous session

Stocks did not collapse

Negative aspects of previous session

Impeachment fear generated significant technical damage

Ambiguous aspects of previous session

When and how will the impeachment ‘stuff’ end?

First Hour/Last Hour Action [S&P 500 Index]

First Hour Up; Last Hour Down

Previous session S&P 500 Index High/Low: 3007.98; 2957.73

Pivot Point for S&P 500 Index [above/below indicates daily trend for traders]: 2977.44

Trump questions Mnuchin over request Chinese delay U.S. farm trip

“Why was that our request, just out of curiosity?” Trump asked.  Mnuchin explained again that the U.S. side “didn’t want confusion around the trade issues.”…

https://www.reuters.com/article/us-usa-trade-china/trump-questions-mnuchin-over-request-chinese-delay-us-farm-trip-idUSKBN1W82KV

Cramer: Mnuchin is going to be in trouble for making Trump look bad over China’s canceled farm tour - Mnuchin clearly took the president off guard, at a Monday meeting at the United Nations, saying that U.S. officials asked the Chinese delegation to call off their tour of U.S. farms — not the other way around…  https://www.cnbc.com/2019/09/24/cramer-mnuchin-is-going-to-be-trouble-for-making-trump-look-bad.html

Ex-intel operative @Kevin_Shipp: This is VERY SERIOUS. Hidden behind the deceptive Wall Street speak is the Federal Reserve creating billions of fake money then, during the night, pumping the money to the World's largest banks to keep them afloat. [Is the funding squeeze a foreign dynamic?]

After the close Pelosi announced: “Today I am announcing the House of Representatives is moving forward with an official impeachment inquiryThe Trump administration’s actions undermine both our national security and our intelligence.”

@RealSaavedra: Nancy Pelosi suggests that Democrats have to impeach Trump because they desperately want to prevent him from getting re-elected: "He can't win, that is very serious"

https://twitter.com/RealSaavedra/status/1176574076229279744

@realDonaldTrump: Such an important day at the United Nations, so much work and so much success, and the Democrats purposely had to ruin and demean it with more breaking news Witch Hunt garbage. So bad for our Country!  Pelosi, Nadler, Schiff and, of course, Maxine Waters! Can you believe this?

Secretary of State Pompeo received permission from Ukraine Government to release the transcript of the telephone call I had with their President. They don’t know either what the big deal is. A total Witch Hunt Scam by the Democrats!

@RepDougCollins: Speaker Pelosi’s decree changes absolutely nothing. As I have been telling Chairman Nadler for weeks, merely claiming the House is conducting an impeachment inquiry doesn’t make it so. Until the full House votes to authorize an inquiry, nobody is conducting a formal inquiry.

@RepJeffDuncan: Dems have spent the last 3 years trying to overturn an election that didn’t go their way by spinning fairy tales of Russian collusion & claiming they had evidence of it. Did they? No. There was no collusion, no obstruction.  Now, in their continued efforts to remove @POTUS Trump from office, Dems are moving on to the next shiny object…

@RepMarkMeadows: So we are all clear what's happening: House Democrats are supposedly beginning an impeachment inquiry, and building it on an anonymous secondhand complaint they haven't seen... which describes a call transcript that they haven't read. You can't make it up.

"Terribly Divisive": Tulsi Gabbard Refuses To Join Fellow Democrats' Calls for Impeachment

“The hyperpartisanship is one of the main things driving our country apart,"…

https://www.zerohedge.com/political/terribly-divisive-tulsi-gabbard-refuses-join-fellow-democrats-calls-impeachment

Senate Judiciary Committee Chairman @LindseyGrahamSC: Interesting concept -- impeach first, find facts later.  Sounds like the mainstream media – write story first, verify later.

Trump Ukraine Whistle-Blower is Represented by Deep State Lawyer [Former CIA official Andrew Bakaj] Who Worked for Hillary Clinton [and Chuck Schumer] https://bigleaguepolitics.com/trump-ukraine-whistle-blower-is-represented-by-deep-state-lawyer-who-worked-for-hillary-clinton/

@brookefoxnews: #ImpeachmentInquiry will put House Judiciary, Intel, Oversight, Ways & Means, Financial Services& Foreign Relations Trump-focuses probes “under one umbrella,” per a Dem source. And according to a Democratic source, @RepAdamSchiff will have a “heavy role” in how the #ImpeachmentInquiry unfolds.

@RepAdamSchiff 10 Dec 2017: Here is what we know: The Russians offered help.  The Campaign accepted help.  The Russians gave help. The President made full use of that help.  That's pretty damning.

White House to let Trump whistleblower testify, release complaint

https://www.washingtontimes.com/news/2019/sep/24/white-house-let-trump-whistleblower-testify-report/

OAN’s @EmeraldRobinson: Why did Pelosi need to announce impeachment proceedings today?
Because the Ukraine story is so damaging to Joe Biden.

Today – Trump tied himself to the stock market years ago.  The president and his merry men have done everything they could to keep stocks buoyant because Team Trump thought it was a key dynamic in his re-election.  Their thought process appeared to be: If stocks stayed buoyant, the economy would follow.

But the impeaching Trump changes the stock market dynamic.  Now, it is better for Trump if stocks tumble on impeachment concerns because it will kill Dems in 2020.  Besides the Fed and China, Trump now can blame a softening economy on Democrats.

So, will Team Trump halt their regular verbal intervention?  Will the mysterious buyers that manipulate ESZs in the overnight market and at key time frames now disappear?

Please recall that when Clinton was impeached, Team Clinton inundated the media with impassioned pleas that impeachment would hurt the stock market and the economy.

The US stock market could be anxious until the House votes on impeachment.  The odds are still low that the House will vote to impeach.  At last count, 157 Dem Reps are for impeachment.  There are 435 Reps.  31 Democrats in the House are from districts that Trump won in 2016.  Coastal and leftist Dems are forcing the impeachment.  Flyover America, except for a few big blue cities, wouldn’t be happy.

If impeachment were likely, stocks would crash.  Yesterday’s decline was mild.

ESZs are +6.50 at 20:00 ET.  Perhaps some traders realize there is no such thing as ‘a formal impeachment inquiry’, though that’s what the ignorant and corrupt MSM reported.  There has to be a House floor vote – and that will put a sizable chunk of Democrats in jeopardy for 2020.

The S&P 500 Index 50-day MA: 2950; 100-day MA: 2922; 150-day MA: 2897; 200-day MA: 2828

The DJIA 50-day MA: 26,600; 100-day MA: 26,365; 150-day MA: 26,265; 200-day MA: 25,771

S&P 500 Index support: 2955-60, 2940-45, 2930, 2922, 2914, 2900, 2880, 2870

Resistance: 2978-82, 2990, 3000, 3008, 3017-22, 3027, 3040, 3050

Expected economic data: Aug New Home Sales 656k; Chicago Fed Prez Evans 8:00 ET, KC Fed Prez George 10:00 ET, Fed Gov Brainard 10:00 ET, Dallas Fed Prez Kaplan 19:00 ET

S&P 500 Index – Trender trading model and MACD for key time frames

Monthly: Trender and MACD are positive – a close below 2502.93 triggers a sell signal

Weekly: Trender is positive; MACD is negative – a close below 2816.78 triggers a sell signal

Daily: Trender is positive; MACD is negative - a close below 2951.31 triggers a sell signal

Hourly: Trender and MACD are negative – a close above 2993.18 triggers a buy signal

Solomon: Let's get real on impeaching Trump: Democrats were first to enlist Ukraine in US elections

Earlier this month… Sen. Chris Murphy (D-Conn.) delivered a pointed message to Ukraine’s new president, Volodymyr Zelensky… its U.S. aid but that could be jeopardized if the new president acquiesced to requests by President Trump’s lawyer, Rudy Giuliani, to investigate past corruption allegations involving Americans, including former Vice President Joe Biden’s family…

January 2016, when the Obama White House unexpectedly invited Ukraine’s top prosecutors to Washington to discuss fighting corruption in the country… turned out to be more of a pretext for the Obama administration to pressure Ukraine’s prosecutors to drop an investigation into the Burisma Holdings gas company that employed Hunter Biden and to look for new evidence in a then-dormant criminal case against eventual Trump campaign chairman Paul Manafort, a GOP lobbyist

Nazar Kholodnytsky, Ukraine’s chief anti-corruption prosecutor, told me that… he saw evidence in Ukraine of political meddling in the U.S. election. That's when two top Ukrainian officials released secret evidence to the American media, smearing Manafort… Valeriy Chaly, the Ukrainian ambassador to the United States at the time, confirmed to me in a statement issued by his office that, in March 2016, a contractor for the Democratic National Committee (DNC) pressed his embassy to try to find any Russian dirt on Trump and Manafort that might reside in Ukraine’s intelligence files…

Biden threatened to withhold $1 billion in crucial U.S. aid to Kiev if Poroshenko did not fire the country’s chief prosecutor… so Poroshenko obliged on March 29, 2016, and fired Prosecutor General Viktor Shokin... Nellie Ohr testified to Congress that some of the dirt she found on Trump during her 2016 election opposition research came from a Ukrainian parliament member… https://thehill.com/opinion/campaign/462658-lets-get-real-democrats-were-first-to-enlist-ukraine-in-us-elections

NY Post editorial board: Why is most of the media circling the wagons to protect Hunter Biden?

Joe Biden’s boasts about getting that prosecutor axed also look clumsy. Then there’s Lutsenko’s claim that the Obama administration handed him a “do not prosecute” list in mid-2016, even as it was pushing Ukraine for dirt on Paul Manafort, Trump’s campaign manager… https://nypost.com/2019/09/23/why-is-most-of-the-media-circling-the-wagons-to-protect-hunter-biden/

The impeaching Trump talk eclipsed this important development:

Convictions tossed out against ex-Flynn business partner- The evidence against Bijan Kian was insufficient to sustain a conviction even though a jury convicted him at a trial earlier this year… https://www.fourstateshomepage.com/news/politics/convictions-tossed-out-against-ex-flynn-business-partner/

Sanders Introduces Massive ‘Wealth Tax,’ Says ‘Billionaires Should Not Exist’ in America

“Billionaires should not exist… There should be no billionaires. We are going to tax their extreme wealth and invest in working people.”… https://hannity.com/media-room/losing-it-sanders-introduces-massive-wealth-tax-says-billionaires-should-not-exist-in-america/




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver