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Home / Business / We talked to 5 money managers about how Trump counterfeiting negotiations can affect the stock market. Here's what they said.

We talked to 5 money managers about how Trump counterfeiting negotiations can affect the stock market. Here's what they said.



Reuters / Lucas Jackson

  • Case handling of President Donald Trump dominated headlines throughout the week.
  • The stock market initially traded with the news, but has since whipsaw amid other geopolitical uncertainty.
  • on how the inquiry negotiations can affect the market in the future. Here's what five of them told Markets Insider.
  • Read more about Business Insider.

On Tuesday, House Speaker Nancy Pelosi announced that House of Representatives will open a formal inquiry into impeachment against President Donald Trump.

The lawsuit came after a whistleblower complaint revealed that the president asked Ukrainian President Volodymyr Zelensky to investigate former Vice President Joe Biden and his son, Hunter, over allegations of corruption at least eight times during a July telephone conversation.

Stocks tumbled after the announcement, received it Wednesday when President Trump signaled that a US-China deal could soon be forthcoming. By Thursday, geopolitical fears had taken over investor sentiment again and stocks were trading largely lower.

The forgery process is happening against a backdrop of growing geopolitical uncertainty that has already roiled markets through the summer. US economic data shows that the trade war is beginning to affect American consumers, businesses, and may even drag down the US economy. And outside the United States, other major economies are either in recession, like Germany, or uncertain, like Italy.

So far, it is unclear whether the inquiry negotiations will have a direct impact on the market, according to money managers interviewed by Markets Insider. And although President Trump tweeted that the market would crash if Democrats admit him, the stock market is still within 3% of a record high.

Read more : A $ 490 billion investment company is concerned about the viability of the companies. Here's how it prepares for an & # 39; inevitable & # 39; collapse.

"I think the market will mainly see past this," Chris Zaccarelli, chief of investment at Independent Advisor Alliance, told Markets Insider in an interview.

He thinks the market will make a big distinction between Trump being impeached and that he is actually being removed from office. At this point, it doesn't look like there will be enough Senate Republicans willing to vote for Trump's removal, Zaccarelli said.

Still, industry watchers are divided over how litigation can affect other market movements such as the trade war.

"You can make the argument that he might be more likely to make a deal with China to get the economy going again," Zaccarelli said.

Given that the trade war has been a major market engine for the past year and a half, it can have a major impact on the US markets.

Business Insider talked to five money managers about what the inquiry means to the stock market and investors in the future. Here's what they said:


Dom Catrambone, CEO of Volhares Large Cap ETF: "Political games, predictions and case management are all temporary events."

Reuters

"As political headlines continue to take center stage, it is important to remember that political games, predictions and case processing are all temporary events in the US markets," Dom Catrambone of Volshares told Markets Insider in a email.

"What these inquiry negotiations will mean for the long-term market is very difficult to diagnose, but it is certain that the case will result in a higher degree of volatility," he said.

"One key element of today's trading environment is the advent of algorithmic trading," he said. "In this trading method, various expressions of political and news coverage, such as & # 39; Trump & # 39; and & # 39; Impeachment & # 39; will automatically trigger trading signals, and therefore add non-fundamental reasons for a particular upturn or downturn in markets. "


Chris Zaccarelli, Head of Investment for the Independent Advisor Alliance: "It's mostly noise"

Reuters

"To the extent that President Trump is impeached but not removed from office, we believe the market will completely look past all these political headlines, "Chris Zaccarelli, head of investment management at the Independent Advisor Alliance, told Markets Insider in an email.

This has happened before, he wrote: "During the time the House voted to admit Bill Clinton and the Senate decided not to remove him from office, the S&P 500 rose 27%," he said.

For investors looking at the news right now, Zaccarelli says most headline headlines should be ignored.

"It's the most noise," he told Markets Insider in an interview. "Unless something materially changes and it looks more likely that President Trump will actually be removed from office, I wouldn't do anything other than you already do."

If you have a long enough time horizon, you shouldn't look at market fluctuations anyway, he said, and when the market goes down, it's actually a good time to buy. For pensioners living on investment income, the situation is different, he said.


Thyra Zerhusen, chief investment officer at Fairpointe Capital: "We are kind of tight around"

Reuters

"We have had an extensive period of volatility," Thyra Zerhusen of Fairpointe Capital told Markets Insider in an interview. Trump has added this with his tariffs on tariffs on negotiations with China and Mexico, she said.

"I think it's not productive, all this uncertainty," she said. "Uncertainty is not good for the stock market, and people are trying to figure out where to hide."

In addition, Zerhusen said the growing uncertainty has hurt companies.

"It has not been Zerhusen said," because the products are unsafe for capital investment, because uncertainty is not good for companies trying to figure out where to put new production. It is disruptive. "

Still, right now, she's not going to change anything." We're hopping around, but basically doing the same thing, "she said." You know, some stocks are quite undervalued, and we add them, "while always keeping the impact of customs in mind, she said.


David Donabedian, chief investment officer at CIBC Private Wealth Management:" The market is not shocked easily "

Associated Press

"After a violent two years, the market will not be shocked easily," David Donabedian, chief of CIBC Private Wealth Management, told Markets Insider in an email.

"Although there has been a slightly negative market reaction to the inquiry To the house, this is perfectly rational and nothing can be called panic, "Donabedian said." Investors are less scared or shocked by the possibility of impeachment and more concerned about the basics of the market. "

In the future, Donabedian said the markets will follow along to see about poli tik and trade talks go on. Trading has been the "biggest cloud of financial markets" over the past 18 months, and the concern is that lawsuit proceedings may stop even more.

He wants to see Nancy Pelosi for signs of what's to come.

"My bet is that Pelosi is leaning in that direction and saying we can go and chew gum at the same time," Donabedian said, and that she will work to advance both the lawsuit and the policy that the USCMA trade agreement.

"We can actually see the passing of the new NAFTA before the end of the year," he said. That, or a trade agreement with Japan, "would be a big deal."


Lewis Altfest, head of investment management at Altfest Personal Wealth Management: "The shock itself may take some time"

Reuters

"This is a kind of shock to the system, although the shock itself may take some time, "said Lewis Altfest, chief investment officer at Altfest Personal Wealth Management, in an interview with Markets Insider.

The most important uncertainty is whether the US and China will come together and agree on a trade agreement, Altfest said. But if Trump is under extra pressure because of an inquiry process, "it becomes even more important that he makes many deals with success," Altfest said. And "it might make him have a deal, but it's not really anything," he said.

Meanwhile, the stock market is high, but is not approaching a bubble, Altfest said, and there are concerns about the underlying economy.

He said that investors should be aware of the possible outcome of current political events. To protect themselves from market fluctuations, "they should be conservative in building the portfolio and have more stable stocks and value-oriented stocks than higher valuation stocks," he said.



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