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Strategist reveals how to think about the market’s two big worries: trade and impeachment

Scott Gamm
Reporter

The stock market has been reactive to the trade war between the U.S. and China and the recently announced impeachment inquiry against President Trump.

Here’s how Jack Manley, global market strategist at J.P. Morgan Asset Management, is thinking about both:

Trade war between the U.S. and China

“I do think trade is the linchpin when it comes to sentiment here and sentiment abroad. What actually matters here is whether or not we get a deal at all, not so much the contents of that deal. I don’t think the fine print is going to matter a whole lot - I think it’s just having clarity - it’s optics.”

Trade talks are reportedly set to resume next week. The trade overhand has largely kept the stock market range bound since early 2018.

U.S. President Donald Trump talks to reporters as he departs for travel to Florida from the South Lawn of the White House in Washington, U.S., October 3, 2019. REUTERS/Leah Millis

Trump impeachment inquiry

“What we’ve seen in the past is a whole lot of the [market] response to an impeachment or a potential impeachment is dependent on what the underlying macro backdrop looks like. If everything else is terrible, then an impeachment is one more bad thing for people to worry about. If everything else looks okay, then the threat of impeachment, like what we’re seeing right now, I think is less of a concern.”

Still, the market has been rocked by some weak economic data in recent trading sessions. On Tuesday, the ISM purchasing managers’ index fell to its lowest level in more than a decade. On Thursday, the ISM non-manufacturing index, which tracks the larger services economy, fell to a three-year low of 52.6 for September, compared to August’s level of 56.4.

AMS

Scott Gamm is a reporter at Yahoo Finance. Follow him on Twitter @ScottGamm.

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