The chief strategist for Julius Baer believes the impact of even a successful impeachment pales in comparison to that stemming from ongoing trade tensions
Possible impeachment proceedings against US president Donald Trump are unlikely to have any significant impact on investor sentiment from the Middle East and other parts of the globe, according to Christian Gattiker-Ericsson, the chief strategist and head of research and investment solutions at Swiss private banking group Julius Baer.
In an interview with Arabian Business, Gattiker-Ericsson said that he believes that the “base assumption” for investors in the Middle East and elsewhere is that there will be an impeachment process, which “in all likelihood…will not be successful.”
“It won’t go through the Senate, which is nominated by Republicans,” he said. “This is an assumption in which you expect headlines that may impact sentiment, but won’t really have a material, fundamental impact.”
Gattiker-Ericsson compared the impact on investors to be similar to that which took place in 1998 when then-president Bill Clinton was impeached but acquitted on charges of lying under oath and obstruction of justice.
“[At that time], we were in an equity bull market and there were some headline ricks around the US president,” he said. “But for the time being, [in Trump’s case] we can’t read anything into the economy.”
The impact of an impeachment – even a potentially successful one – pale in comparison to the negative impact of investor sentiment caused by global trade tensions.
“The uncertainties around the trade tensions were a lot more meaningful, and were a sentiment killer this year,” he added. “Sentiment broke down. Not just investor sentiment, but industrial sentiment, because CFOs and purchasing managers didn’t know what the rules were going to look like into next year.
“They held back in terms of spending and the way they behave,” Gattiker-Ericsson continued. “There was real spill-over on the global economy on that front. I doubt even a successful impeachment would be the same.”
An impeachment inquiry against Donald Trump was initiated in late September following allegations that the president and several high-ranking administration officials had allegedly pressured foreign governments – most notably Ukraine – to benefit his personal and political interests.