-Source- U.S. News and World Report
President Donald Trump is a master showman. In his prior life as real estate developer and reality TV star, you couldn't go a day without seeing his name in the tabloids. But taking full credit for the creation of wealth in America – and the ability of the stock market to function smoothly – is a bit gone too far.
But the president – in a "Fox & Friends" interview conducted right after his former lawyer Michael Cohen implicated Trump in criminal campaign finance violations – felt a need to convince the American people how terrible a world without him calling the shots would be.
"If I ever got impeached, I think the market would crash. I think everybody would be very poor, because without this thinking," Trump said, pointing to his own head, "you would see, you would see numbers that you wouldn't believe in reverse."
[See: 7 Stocks That Soar in a Recession.]
Does this make sense? Not really, for a few reasons.
Finance 101: Stocks follow profits. In the long term, stock prices track quite nicely with corporate profits. They rise together, they fall together. This is Finance 101.
"With a very strong earnings season and corporate profits enjoying the fruits of a recovery that's gained momentum over the past five years or so, this type of news is not directly affecting the reality of strong earnings," says Steve Frazier, investment manager at Wakefield, Rhode Island-based Frazier Investment Management. "Real news of underlying fundamentals like borrowing costs, earnings growth, and GDP will continue to move markets as we've seen over this past economic cycle."
Despite his self-promotion, Donald Trump lacks the ability to think additional corporate profits into existence.
To be clear, the stock market gyrates for other reasons, too, and the political division and uncertainty created by a Trump impeachment likely wouldn't inspire a flurry of buying.
Still – would the economy screech to a halt without Trump in the White House? Read more
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