Trump has dubious claim on House Democrats investigation, stock market

President Donald
Trump
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• President Donald Trump attempted to link the possibility that
  House Democrats could investigate him to a recent downturn in
  stocks.
• “The prospect of Presidential Harassment by the Dems is
  causing the Stock Market big headaches!” Trump tweeted
  Monday.
• After taking back the House in the midterm elections,
  Democrats could now look into the president’s tax returns — and
  with them his finances and potential conflicts of
  interest.
• But while the investigations are a real possibility, most
  market analysts attribute the recent decline to weak guidance
  by major companies and fears over trade war escalation — not
  the midterm results.

President Donald Trump on Monday attempted to pin a recent
decline in stocks on Democrats, baselessly blaming the
possibility of numerous investigations by House committees.

“The prospect of Presidential Harassment by the Dems is
causing the Stock Market big headaches!” Trump tweeted
Monday.

The Dow Jones Industrial Average
was down just over 400 points as of 11:30 a.m. ET.

While the stock market has been on rough footing lately,
most analysts attribute the issues to major companies
signaling weaker-than-expected
future earnings and
continued trade war fears, rather than the results of the
midterm elections.

This is especially true since the results — Democrats winning the
House and the GOP holding the Senate —
came in as expected. Analysts say the likelihood of gridlock
with a divided Congress is a neutral result for stocks and likely
has little impact.

But Trump has for weeks claimed that a Democratic victory in the
midterms would be negative for stocks and
increased focus on the market in the run up to Election Day.

Following the midterms, Trump has doubled down on arguing that
there is no reason for investigations into possible connections
between the president’s campaign and Russia. He has also
reiterated his
tax returns shouldn’t be released. 

But the biggest political problem for markets may not be
Democrats, but rather a
problem of Trump’s own making. Continued pressure from
the
president’s trade war and the
possibility that the conflict could escalate has been cited
as analysts as one of the biggest threats to the market’s
continued growth.

“This trade issue is clearly the wild card for both the
global economy and investing,” David Kelly, chief global
strategist at JPMorgan Funds, wrote in a note to clients.

He added: “If 2019 brings with it a major escalation in the
trade conflict with China, with no resolution in sight, it would
be a significant negative for
global 
stocks
 and
US 
stocks
 and could lead to a
higher dollar and lower interest rates.”