Stocks soar as NYSE trading floor reopens from coronavirus shutdown
Stocks soar as NYSE trading floor reopens from coronavirus shutdown

By Tom Ozimek

Stock markets in Europe and the United States shrugged off the Dec. 18 vote by the U.S. House of Representatives to impeach President Donald Trump.

U.S. stocks rose to all-time highs on Dec. 19, as investors took news of the impeachment in stride.

Kevin Muir, a veteran trader and author of the MacroTourist, a macroeconomics blog popular among professional investors, told The Epoch Times that markets remained unruffled by the vote because participants know there’s essentially no chance Trump will be removed from office.

“The market knows the impeachment will not make it through the Senate,” Muir said. “It’s a non-event for the markets. You can see that in the fact that the spooz were unchanged overnight.”

“Spooz” is jargon for index futures contracts on the S&P 500 (SPX). As bets on the future prices of U.S. stocks, SPX futures are seen by traders and analysts as a proxy for the direction of market movement.

In addition, U.S. Treasury Secretary Steven Mnuchin said an initial U.S.–China trade deal would be signed in early January, adding to optimism that was fueled by a breakthrough in trade talks last week.

The S&P 500 advanced 0.5 percent to 3,205.37, marking its first close above 3,200. The Dow Jones Industrial Average (DJI) climbed 137.68 points, or 0.5 percent, to 28,376.96. The Nasdaq Composite (IXIC) gained 0.7 percent to end the day at 8,887.22.

Historic S&P 500 chart. (Reuters)

Meanwhile, European shares edged higher on Dec. 19, with the pan-European Stoxx 600 rising 0.1 percent, the FTSE 100 up by 0.2 percent, and the German DAX noting a slight drop of 0.3 percent.

In an interview with CNBC, Mnuchin said the agreement had already been put down on paper, and that it was completely finished and just undergoing a technical “scrub.”

U.S. stocks will continue to have an upward bias until the start of 2020, when investors will look for more specific details in the trade agreement, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

“Investors are essentially waiting to see what happens next, moving from a ‘tell-me-something-good’ environment to ‘show-me-something-good,’” Arone said.

Further boosting optimism around the strength of the U.S. economy and labor market, data on Dec. 19 showed the number of Americans filing applications for unemployment benefits dropping from more than a two-year high last week.

Newly released Labor Department data (pdf) showed a dip in weekly jobless claims, with initial claims for state unemployment benefits falling by 18,000 to a seasonally adjusted 234,000 for the week ended Dec. 14.

Economists polled by Reuters had forecast claims would fall to 225,000 in the latest week. They expect claims to remain elevated relative to October’s low reading, given the volatility in the data around the holiday season and end of the year.

The four-week moving average of claims rose 4,250 between the November and December survey periods, suggesting some cooling in job growth. The economy added 266,000 jobs in November, the most in 10 months. The unemployment rate fell back to 3.5 percent, the lowest in nearly half a century.

Labor market strength is underpinning consumer spending, keeping the economy on a moderate growth path despite headwinds from the trade tensions and slowing global growth.

McConnell: Impeachment ‘Partisan Rage’

On Dec. 18, House Democrats approved two articles of impeachment (pdf) against Trump—abuse of power and obstruction of Congress. No Republicans joined them, and two Democrats joined Republicans for a bipartisan vote against the first article and three Democrats broke ranks to vote no on the second article.

The abuse of power article was passed on a vote of 230–197, with one “present,” and the obstruction article was passed 229–198, with one “present.” The votes don’t remove Trump from office, but sends the articles to the Republican-controlled Senate for trial next month.

House Speaker Nancy Pelosi (D-Calif.) delivers remarks alongside House Judiciary Chairman Jerry Nadler (D-N.Y.) and House Foreign Affairs Chairman Eliot Engel (D-N.Y.) following the House of Representatives vote to impeach President Donald Trump in Washington on Dec. 18, 2019. (Sarah Silbiger/Getty Images)

Senate Majority Leader Mitch McConnell (R-Ky.) said on the Senate floor in Washington on Dec. 19 that Trump’s impeachment was a result of “partisan rage.”

“Last night, House Democrats finally did what they had decided to do a long time ago: they voted to impeach President Donald Trump,” he said, calling the impeachment inquiry the “most rushed, least thorough” in “modern history.”

Senate Majority Leader Mitch McConnell (R-Ky.) at a press conference in Washington on Dec. 17, 2019. (Saul Loeb/AFP via Getty Images)

Democrats have been trying to impeach Trump since before he was nominated as the Republican presidential nominee, McConnell said, citing news reports and lawmakers from 2016 and 2017.

“Now, their slap-dashed process has concluded in the first purely partisan presidential impeachment since the wake of the Civil War. The opposition to impeachment was bipartisan. Only one part of one faction wanted this outcome,” he added.

Zachary Stieber and Reuters contributed to this report.

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