Want Insight Into Trump Impeachment Odds? Watch GOP Special Elections

President Donald Trump has taken fire from critics in recent weeks following his firing of FBI head James Comey. While Democrats and even some Republicans are calling for a Trump impeachment, investors are trying to figure out what, if any, impact the recent developments will have on the Republican agenda of healthcare reform, tax reform and corporate deregulation.

Special Election Surprises: Maybe Not Wins, But Margins Are Closing

Special elections in five Republican-held districts this year could be the best indicator of whether Trump’s antics have shifted public opinion against Republican policies, Height Securities analyst Peter Cohn said. Prior to former President Richard Nixon’s departure from office in 1974, Republicans lost special elections in five districts and subsequently lost 43 additional House seats in the midterm elections.

So far this year, Republicans secured a closer-than-expected special election in Kansas last month. Montana Republican Greg Gianforte held onto his seat in Montana on Thursday as well, but his projected 6.7 percent margin of victory was much narrower than the double-digit margin he held in recent public polls. Cohn said even tight Democratic losses in states like Montana could be a sign that the public is losing patience with Republicans.

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“We think Republicans will win four out of five special elections (the outlier being Georgia) and the Democrats have a 25 percent chance of taking the House back in 2018 at this point, barring some Russia-related bombshell that sinks both the GOP and Trump (we currently have 15 percent odds Trump is impeached/forced to resign),” Cohn said.

Republicans will also not feel pressure to undertake a Trump impeachment unless they feel their seats may be at risk if they don't, Cohn said.

If Democrats appear poised to take back control of Congress in 2018, the stock market could give back much of the gains it has logged based on the Republican economic agenda. The SPDR S&P 500 ETF Trust SPY is up 12.7 percent since Election Day.