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What Would A New President Mean to E-mini S&P 500 Futures

January 22, 2020 by Daniels Trading| Tips & Strategies

In many ways, 2019 turned out to be a historic year for both politics and S&P 500 futures. US stocks rallied to unprecedented heights and, for only the third time in history, the US House of Representatives impeached a US president.

E-mini S&P 500 Futures Drive Higher

On December 18, 2019, the US House of Representatives voted in favor of impeaching Donald J. Trump on two separate articles. Although broad in scope, the charges put forth formally outlined obstruction of justice and abuse of power. Each was upheld by the House of Representatives, which voted 230-197 and 229-198 “in favor of” each charge, respectively.

As a general rule, political uncertainty leads to market turmoil. Heavy volatility frequently develops during elections or an unplanned regime change, with buyers and sellers interpreting the events very differently. However, December 2019 proved to be an exception to this rule. March 2020 E-mini S&P 500 futures put in a solid month amid the fresh uncertainty, closing out what was a big year for US equities:

  • December gains measured 85.25 points, a rally of 2.71 percent.
  • As a whole, the S&P 500 Index rose almost 30 percent and routinely posted fresh all-time highs.
  • Apple Inc. (AAPL) and Microsoft Corp. (MSFT) set the pace, each gaining 14.8 percent for the year.
  • E-mini S&P 500 futures experienced robust participation, regularly trading over 1 million contracts per day on the Chicago Mercantile Exchange (CME).

The solid 2019 performance of the S&P 500 placed an exclamation point on the three-plus-year “Trump rally” in US stocks. Strong equities valuations became the norm, most of which was attributed to low unemployment, dovish monetary policy from the US Federal Reserve, and steady economic growth.

The robust performance of late-2019 set the stage for a strong start to 2020. January featured the S&P 500 rallying above 3200.00 and the Dow Jones Industrial Average cracking the 29,000 level on several occasions. Despite House impeachment efforts and the future trial in the US Senate, investors didn’t hesitate to pile onto the long side of American stocks.
Our blog has critical trading information perfect for new and experienced traders, hedgers, producers, and investors.

Projecting 2020

At press time, the final chapter of the Trump impeachment saga has yet to be written. Nonetheless, the Senate trial is expected to be held in early 2020. Here are a few elements integral to the trial’s outcome:

  • A two-thirds Senatorial majority must vote “in favor of” to convict Trump of either article.
  • If Trump is convicted, his presidency ends, effective immediately.
  • Opinion polls ahead of the trial painted a murky picture of potential outcomes. Eleven senators have publicly supported impeachment, 38 have publicly opposed the articles, and 51 have not yet made their opinion known.

From a practical standpoint, any upheaval in political leadership is likely to at least temporarily hamper US stock valuations. In the event that Trump is convicted by the Senate, Vice President Mike Pence will complete the term as president. Given the rapidly approaching 2020 general election, the scenario for Trump’s long-term predecessor remains largely unclear.

Although Trump is widely expected to be acquitted, E-mini S&P 500 futures are still likely to experience turbulence when the final verdict is announced. Any introduction of political uncertainty typically brings enhanced volatility; the impeachment hearings of 2020 will likely do the same.

Politics and the Markets

Without a doubt, politics is one of the key fundamental underpinnings of today’s US stock markets. The House impeachment of Donald Trump didn’t do much to stymie the strength of the equities markets, but it remains to be seen whether the Senate trial, the removal of Trump, or another type of shake-up will affect E-mini S&P 500 futures. Though the exact degree of change remains a mystery, short-term volatilities are all but assured.

Staying on top of politics and their impact on the markets is a full-time job. A great way to accomplish this task is to subscribe to Daniels Trading’s proprietary and third-party trading advice services. Featuring current analysis on the most important issues in futures, Daniels Trading’s Trading Advice portal is an essential asset for active traders of all types.
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Filed Under: Tips & Strategies

About Daniels Trading

Daniels Trading is an independent futures brokerage firm located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading is built on a culture of trust committed to the firm’s mission of Independence, Objectivity and Reliability.

Risk Disclosure

THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.

THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.

TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.

YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.

GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.

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Risk Disclosure

THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.

THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.

TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.

YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.

GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.

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