Investment guru Art Cashin says financial markets are betting Mike Pence will continue the administration's pro-business policies should President Donald Trump's legal problems explode.
"Intriguingly, the president's legal woes don't seem to have any market effect yet," Cashin recently told CNBC.
Cashin, UBS director of floor operations at the New York Stock Exchange, said investors are calling such a strategy the "Pence put," meaning markets expect Pence will have no issues taking lead at the White House if Trump becomes "handicapped."
Trump last week warned that the stock market will crash and "everybody would be very poor" if Democrats regain control of Congress and attempt to impeach him.
"I guess it says something like high crimes and all — I don't know how you can impeach somebody who has done a great job," Trump told Fox News' "Fox and Friends" co-host Ainsley Earhardt, during a wide-ranging interview recorded Wednesday at the White House and aired Thursday morning.
"I will tell you what, if I ever got impeached, I think the market would crash. I think everybody would be very poor because without this thinking, you would see numbers that you wouldn't believe in reverse," Trump said.
Further, he said, if Hillary Clinton had won the 2016 election, instead of the current 4.1 percent growth, the economy would have tanked.
Instead, Trump said he got "rid of regulations," and "did a lot of things."
In examining Trump’s claim about a crash, investors might reasonably ask how much of the policy benefit would be rolled back if his presidency were threatened. Analysts were mostly skeptical the president is in any real danger and not sure there’d be any major impact should he be, Bloomberg explained.
“Equity markets don’t seem to care, and we think they are right,” Nicholas Colas, Co-founder of DataTrek Research, wrote in a note. “Rates are low, the dollar is strong and corporate earnings remain robust. Those are the only things stock prices can (and should) actually discount.”
Material from Bloomberg, Reuters and the Associated Press were used in this report.
© 2024 Newsmax Finance. All rights reserved.