Whispers of a potential impeachment of President Trump have gotten louder this week as reports surfaced of a memo written by former FBI head James Comey outlining a meeting in which Trump asked him to drop the FBI’s investigation into Trump’s ties with Russia.
The SPDR S&P 500 ETF Trust (NYSE: SPY) is down 1.1 percent on Wednesday as investors fear the worst from Washington, but Height Securities analyst Peter Cohn thinks the market is getting way ahead of itself.
According to Cohn, the chances of impeachment have risen this week, but Cohn estimates there is still only a 15 percent chance Trump will be removed from office.
“Ultimately, impeachment proceedings are a longshot and are inherently political, controlled by the majority party in Congress,” Cohn explains.
The media has swarmed over isolated comments by congressmen such as Republican Justin Amash, who says Trump’s firing of Comey could be grounds for impeachment.
However, Cohn says Republicans will not willingly move to unseat Trump unless pushed to do so by their constituents.
“We are watching special elections for House seats in Montana on May 25 and in Georgia on June 20 for indications that the GOP is losing its grip on public support, which could cause other Republicans to begin calling for change at the top—a prerequisite for such drastic action,” Cohn writes.
Cohn also says that, despite the initial negative reaction to rumblings of impeachment, investors may soon realize that a Mike Pence presidency could be a much more stable and predictable environment for U.S. businesses.
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