Equity markets came under pressure in the U.S. session when it was announced that the Democrats will indeed begin an impeachment inquiry on Donald Trump. This shouldn’t come as a major surprise, given the famous equity-touter in chief has provided the ‘Trump-pump’ to support equity markets more times than one can remember.
Still, it’s the beginning of a long and hard struggle for the Democrats as Republicans run the senate; with 2/3rd majority required to vote to impeach Trump, it looks far from uncertain and much closer to unlikely. Regardless, it could certainly hamper his efforts to focus on his agenda and successfully navigate his way through the trade war that he started which provide another headwind for equities along with the fear of a global recession.
Whilst its far from certain Trump will actually be impeached, it was enough to wobble U.S. equities. And, given the monthly reversal candles on the S&P 500, we look at the potential trigger level to mark a larger decline.