Investors trying to determine the downside risk to stocks from impeachment inquiries into President Trump (and a possible impeachment) now need to add another tool to their already jam-packed toolkit.
A steady diet of daily Republican-leaning Fox News watching, says one long-time policy expert.
“What we got asked constantly last week is where would this impeachment proceeding change. The conventional wisdom is that the House will impeach, the Senate will not convict. So what would change that dynamic in the Senate, the signal the dam is starting to break for this president,” Raymond James Washington policy analyst Ed Mills explained on Yahoo Finance’s The First Trade.
D.C. veteran Mills added, “One of the things we have thought is that the president gets a lot of support politically by Fox News and if they get more and more critical and abandon him, that’s where I think the signal on Capitol Hill is that this is something that is very different than in times past and might have a significantly increased chance that the Senate would be willing to convict on any of the impeachment charges the House finds.”
Should Trump lose the support of Fox News — which arguably helped him win over working class Americans in his ascent to the presidency in 2016 — that could put his re-election bid in 2020 in serious jeopardy.
For starters, it could cause hardened Senate Republican supporters of Trump to jump ship and support the House’s inevitable impeachment. Even if Trump manages to sidestep an impeachment, the loss of the influential Republican focused Fox News would make it quite difficult to win a second term.
Consequently, that ratchets up the prospect of potentially less business-friendly Democratic candidates Senator Elizabeth Warren and former Vice President Joe Biden winning the White House next year. Markets could react especially negative if the borderline socialist Warren wins the presidency.
At the moment, it doesn’t appear Trump has lost the support of Fox News despite a second whistleblower in the president’s dealings with Ukraine coming forward. Trump’s approval rating currently stands at about 40% per a new Gallup poll, surprisingly not too changed from the 43% in early September.
Meanwhile, the S&P 500 stands about 2.5% away from its all-time high as investors have generally shrugged off impeachment concerns.
But again investors, keep an eye on the tone on Fox News. It may decide another election... and the performance of your stock portfolio.
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi
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