Would stocks crash with a Trump impeachment?

President Donald Trump warned in a tweet last month amid the Ukraine whistleblower inquiry that his impeachment would cause “the markets crash.” Trump’s tweet came a day after the release of a rough summary of a July 25 phone call with Ukrainian President Volodymyr Zelensky. The summary showed Trump asked Zelensky to investigate former Vice President Joe Biden and his son Hunter Biden. It was preceded by a whistleblower complaint that alleges Trump used the powers of the president’s office to solicit interference from a foreign country ahead of next year’s election. The complaint, along with the call, prompted an impeachment inquiry by the House of Representatives. This is not the first time Trump has warned of a market shock if Congress impeaches him. Last year amid the investigation into Russia meddling in the 2016 election, he told Fox News, “If I ever got impeached, I think the market would crash. I think everybody would be very poor.” Is Trump right? Probably not. First, the risk to markets and the economy is not really that Trump might actually get forced out of office. Barring a truly devastating revelation, the Republican-controlled Senate will not vote to remove Trump, a president with

October 3, 2019 No Comments

Investors really should care about immigration. Do you?

Why for-profit immigration detention facilities need to be excluded from socially responsible portfolios If you’re anything like me, you’ve watched with heartbreak the countless images flooding the news these days of asylum seekers in cages and children separated from their parents. You may have also wondered what you can do, short of heading to the border to volunteer for a legal aid organization. If you have money invested in the stock market — perhaps in a retirement account — one thing you can do is make sure your dollars aren’t supporting the for-profit prisons that hold detained immigrants. About 70 percent of immigrant detainees are held in facilities owned by for-profit companies, according to the National Immigrant Justice Center. The two largest for-profit prison contractors in the United States are GEO Group and CoreCivic. They’re also the only ones that are publicly traded companies. Together, they imprison thousands of immigrant detainees across the country. According to Bloomberg, GEO Group is the larger of the two, running 11 immigrant processing centers around the country and one family residential center under a contract with Immigration and Customs Enforcement (ICE). CoreCivic runs eight, including a facility for families in Dilley, Texas. In June,

July 5, 2018 No Comments

Health care investing in a ‘post-Obamacare’ world

President Trump announced on October 16 that the Affordable Care Act, commonly known as Obamacare, is “dead.” How should investors interpret this new level of uncertainty introduced into the health care system? First, it’s important to clarify that Obamacare is still the law of the land and that taxpayers will pay a penalty if they do not have insurance as the law mandates. But the law has been thrown into disarray, to be sure. Here’s how. Last week, Trump signed an executive order bolstering short-term insurance policies, and later that day announced the end of $7 billion in cost-sharing subsidy payments to health insurance companies. Bipartisan congressional efforts to fix the subsidy program notwithstanding, this is expected to raise premiums in the individual insurance market and have untold effects on industries in the health care sector, which makes up one sixth of the U.S. economy. Hospitals and insurers could take a hit On a structural basis, this news looks bad for hospitals first. Hospital groups could see their bad debts go up if more people opt for “skinny” plans, and traffic could be driven lower very quickly. If behavioral health, substance abuse care, and other essential health benefits are not

October 20, 2017 No Comments

Azzad joins coalition asking CEOs to oppose Pres. Trump’s refugee and immigrant ban

(Falls Church, Va., 2/2/17) — Azzad Asset Management has joined other socially responsible investment institutions in signing a coalition letter to the 19 CEOs who are members of President Trump’s Strategic and Policy Forum, asking them to exercise their influence to oppose the president’s recent executive order barring refugees and certain immigrants from seven majority-Muslim countries. In addition to public outcry against the ban on humanitarian and constitutional grounds, many have pointed out the negative impact of barring international workers on the economy, including several of the CEOs on the presidential forum. Written by the International Corporate Accountability Roundtable, the Institute for Human Rights and Business, and the Interfaith Center on Corporate Responsibility, the letter calls on these business leaders to use their position on the Strategic and Policy Forum to: speak out strongly against the president’s executive order and work to have it rescinded, encourage the president to ensure respect for all workers without discrimination, and urge the U.S. government to align corporate policies with the UN Sustainable Development Goals. The letter was signed by 64 socially responsible investment firms and human rights and religious organizations. The Strategic and Policy Forum’s first meeting is scheduled for February 3. The

February 2, 2017 No Comments

Make investing great again

Why a Muslim investment company thinks shareholder activism is what this country needs right now As President-elect Trump goes about the task of putting his administration and cabinet in order, one thing looks certain: corporate lobbyists are setting their sights on the political novice and his team. I read with great concern a recent article on the coterie of influence peddlers lining up to sway the new administration (“With Trump’s Election, a Bonanza for Washington Lobbyists,” The New York Times, November 10, 2016). Doubtless the pernicious influence of lobbyists was present during the Obama years, but for the anti-establishment candidate who staked his political reputation on “draining the swamp,” the hypocrisy is particularly striking. It is not surprising that corporate interests exercise power whenever and wherever possible in order to maximize profits, and by extension, value for shareholders. That value can take many forms, however, and there are often competing definitions of the word itself. Corporations make many of the most consequential decisions in today’s society, and in a Trump administration the private sector may well take on an outsized role. Those who feel disempowered after last week’s election result may want to turn to shareholder advocacy as a way

November 14, 2016 No Comments

Markets react to a Trump surprise

Azzad Special Election Comment Early this morning, Dow futures dropped 750 points in the wake of Donald Trump’s electoral victory. In fact, the news sent a shock wave through global markets, with most selling off over fears of what a Trump win means for the status quo. Although the U.S. stock market has posted gains as of this writing, investors are still left with a sense of unease. A look back at history offers an important lesson: stock market moves over the 24 hours following an election predict the market’s direction over the next 12 months less than half the time. With Trump about to assume office, keep in mind this interesting comparison showing the relationship between the U.S. government’s composition and market performance. Between 1926 and 2015, when both houses of Congress and the White House were controlled by the same party — as they will be in January 2017 — both the S&P 500 and a diversified 60/40 stock/bond portfolio averaged the highest returns.* The next highest returns came when government was “partially divided,” with the House and Senate controlled by the same party, but the White House held by a different party. The “completely divided” scenario, which occurred

November 9, 2016 No Comments

Election 2016 commentary: How markets may fare in a Trump administration

Note: At Azzad, we do not position our portfolios in anticipation of any singular event. Rather, we focus on factors that we believe allow our clients to increase their chances for a positive investment outcome across all market environments over the long term. For more detail, watch Azzad’s video on the pitfalls of a short-term investing focus. Markets detest uncertainty. As America approaches the eighth year of an economic expansion, any event that might upset the apple cart can take on outsized importance. The status quo, which Hillary Clinton largely represents, has been a boon to stocks over the last several years. But a Donald Trump victory would qualify as a break from business as usual. What would that mean for your portfolio? Let’s break down the 2016 race to the White House and outline a few possibilities. How would Trump impact the economy? It’s true that politics and economics are intertwined and presidents can impact a country’s economic growth, but there are limits to that influence. Trump has promised to boost U.S. GDP immediately to 4-5%, but there are far too many complexities for a single person to have that much positive impact. The opposite, however, might not hold

November 2, 2016 No Comments