Dow Clings to Gains, Democrats Set to Impeach the President
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- The pandemic is still weighing heavily on the economy
- Impeachment charges on the horizon for President Trump
The US market barely made it to profit yesterday as market participants continued to weigh in the rising Covid-19 cases, the sluggish rate of vaccination, a further rise in bond yields, and the political saga unfolding in Washington. The resurgence in new Covid cases cast worries about the economy’s growth as the market is expecting another round of fiscal stimulus from the incoming administration of President-elect Joe Biden.
The Dow Jones Industrial Average added merely 60 points, or 0.19%, which was enough for the benchmark index to avoid back-to-back losses. Similarly, the S&P500 closed higher by 1.58 points, or 0.04% while the Nasdaq Composite rose 36 points, or 0.28% to close at 13,072.43, its second-highest close in history. As stocks ended last week at record highs. This week, investors are cautiously optimistic on the back of rising bond yields this month. A sell-off in the treasury market pushed the 10-year Treasury note to its largest weekly rise since June. As a result of the recent move in the bond market, investors are watching for a potential surge in inflationary pressure. If realized, this could prompt the Federal Reserve to scale back its asset purchases earlier than expected. However, given the weak economic data for December, the Fed could be hesitant to cut back or continue to support the economy, as it has vowed multiple times in the recent past. The pandemic is still having a strong impact on the state of the US economy and that was seen in the disappointing December jobs report, which showed the US lost 140,000 jobs in December, ending the 8 months of continued job growth
A Time for Unity
This week continues to be eventful as markets keep an eye on the Democratic efforts to impeach President Donald Trump. Following the riots last week, US prosecutors are now considering sedition charges for the insurrectionists, while Vice President Mike Pence ruled out invoking the 25th amendment to remove Donald Trump from office. The House of Representatives voted 223-205 on Tuesday night on the resolution that would compel Mr. Pence to “convene and mobilize” Trump’s administration to remove the President from power. In his letter to House Speaker Nancy Pelosi, Mr. Pence rejected the resolution and said he would not invoke the 25th amendment to strip President Trump from his powers because “now is the time for us to come together, now is the time to heal” after the “horrific events” of last week.
The rejection sets the stage for the Democrats to impeach the US President on Wednesday, only a week before the inauguration of President-elect Joe Biden. The vote expected today will be on a single article of impeachment, charging Mr. Trump with “high crimes and misdemeanors” and “inciting violence against the government of the United States”.
In early 2020, lawmakers voted on the impeachment of President Trump for the first time. If the President is impeached again, he would be the first US President impeached twice. President Trump, in his defense, has rejected the blame for the Capitol riot.
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