Stocks hit record highs despite impeachment — here's the what, when, and why
Scoreboard... Wondering how US stocks are doing? Check out the S&P 500 — the index reflects the value of America's top 500 publicly-traded companies. Huge companies move the S&P 500 the most (Apple, Microsoft, Amazon), while little guys affect it less (think Gap, Expedia, Kellogg).
- The S&P 500 rose 1.64% last week to 3,221, the highest it's ever been
- It's up 3.5% in the past month
- So far in 2019, it's leapt a giant 28%, nearly tripling the index's average annual increase over the past 90 years
It's the scoreboard every company (and investor) craves to beat... because it reflects the stock market's health as a whole. Shocked Boeing's stock is up 1% this year? That's actually bad compared to the average 28% increase of the top 500 US stocks. The S&P 500 is winning thanks to this hat trick:
- Profits: As the global economy grows, American companies are keeping a much bigger chunk of profits than before, thanks to the tax cut (happy 2-year anniversary, tax cut).
- Trade: Trade tensions with China are easing and Congress just passed a new trade deal for North America — that combo is chicken soup for business managers' souls.
- Rates: The super low interest rates the Fed has set encourage borrowing and spending — it's the soothing CBD-something sprinkled on top.
Politics doesn't always ruin stocks... Deregulation of financial markets in the 2000s led to the '08 financial crisis. But last week's impeachment hasn't — some political drama messes with Wall Street, some stays on Twitter feeds. Impeachment isn't expected to affect corporate profits, trade, or interest rates. Plus, economists aren't expecting a recession next year (like they were last Christmas).