Will the Stock Market Follow the Success or Failure of Trump Presidency?

Here’s a short conversation I had about noon yesterday with a friend who manages a hedge fund, an extremely tiny portion of which is my 401(k).   The guy is a “Type A” Trump supporter (see explanation below), and, like Trump, graduated from Wharton.  I wrote this largely in jest, but he seems to have taken it seriously.

Craig: The DJIA is down 77 points (0.3%) based on the first &^%&^% (“gosh darn”) indictment!  Am I going to lose 30 basis points for every one?  It’s going to start raining indictments.  Should I should get of the market before it’s too late?

Friend: We are pretty heavily hedged; I can’t tell you exactly what will bring the market down.

In truth, he and I have had this discussion before, as I think it’s worth knowing what will happen to the stock market in the very real scenario that the Mueller investigation (or something else) brings Trump’s presidency to a premature end.  How much of this potential implosion is already baked into stock prices?

The bottom line is that my friend doesn’t know, which, in my estimation means that nobody knows.   He’s very bright, and doesn’t make many mistakes where all this is concerned.

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Explanation of above:

There are two distinct types of Trump supporters:

Type A (approx. 5%): Wealthy libertarians whose primary (or maybe sole) criterion for judging a president is his policies’ effect on the stock market, and thus their personal affluence. Note: the stock market is completely indifferent to the quality of life afforded to 99%+ of the human population.

Type B: (the other approx. 95%) People who are actually negatively affected by Trump’s policies but who are too ignorant to understand this, and are attracted to his social policies of racism, Islamophobia, homophobia, climate denial, war-mongering, and the removal of programs designed to provide healthcare, education, and other forms of government-backed support, regardless of people’s ability to pay.