A Tale of Two Proceedings
On September 24th, the House of Representatives announced that it would open an impeachment inquiry against the current president, potentially initiating the fourth such proceeding in U.S. history (Johnson–1868, Nixon–1973, Clinton–1998). The question for investors is: What happens to the stock market during these types of proceedings?​

Chart for AOM​​​

  • After the Nixon impeachment proceedings were announced, the Conference Board Consumer Confidence Index fell 28% from the time of the disclosure on October 30, 1973, to when Nixon resigned on August 9, 1974. During this time, the stock market also declined significantly, falling 26%. It’s important to note that the Nixon impeachment transpired during an ongoing bear market driven by the Arab-Israeli war, a spike in oil prices and high inflation.

  • However, the trends were very different during the Clinton impeachment proceedings. From the formal announcement of the impeachment proceedings on October 8, 1998, to the acquittal in the Senate on February 12, 1999, consumer confidence increased 12% and the S&P 500 Index jumped 28%. Simultaneously, investors enjoyed strong productivity gains and began to feel the euphoria of the dot-com boom.

  • The lesson of these two very different scenarios is that the underlying fundamentals of the economy are more likely to drive the stock market than what is happening in Washington, D.C. We believe that current issues such as the U.S.–China trade war or concerns about global growth are much more likely to propel the direction of the stock market than the current impeachment inquiry.



The views expressed are the views of Fred Alger Management, LLC. as of October 2019. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, LLC. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund shares.

Risk Disclosure: Investing in the stock market involves certain risks, and may not be suitable for all investors. Growth stocks tend to be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Technology and healthcare companies may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. Investing in companies of small and medium capitalizations involve the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio. Foreign securities involve special risks including currency risk and risks related to political, social, or economic conditions.​ 

Fred Alger & Company, LLC 360 Park Avenue South, New York, NY 10010 / www.alger.com

800.305.8547 (Retail) / 212.806.8869 (Institutional) ​