Advisors get paid to worry, and few get paid more to worry about what happens in Washington, D.C., than Horizon Investments' chief political strategist Greg Valliere. In a talk this morning before the Investments & Wealth Institute in New York City, the longtime Beltway observer shared his biggest fears with advisors.

A shutdown of the Federal government this weekend is likely, though Valliere said a brief shutdown would have little impact on the financial markets. An extended shutdown of several weeks would be a different matter and could have a negative effect on asset prices,

Both political parties are "itching for a fight," he noted. "We're likely to get a shutdown, either now" or in February.

But the prospect of a trade war could be far more problematic for the U.S. economy. Valliere cited Canada, which makes a huge percentage of trucks sold in America, and China as places where trade wars could erupt.

The U.S. Chamber of Commerce is seriously concerned about a possible trade skirmish, and both U.S. manufacturers and agricultural businesses could be adversely impacted. President Trump appears to be willing to challenge China on trade, even though many of chief economic advisors are not.

A string of indictments from special prosecutor Robert Mueller also are coming soon, according to Valliere. Getting a perjury indictment in Washington is easy, but the political strategist speculated that ultimately Moeller might be able to get money laundering indictments, possibly against first family members Donald Trump Jr. and son-in-law Jared Kushner.

Like most special prosecutors, Moeller will use a series of plea bargains to strong-arm various players in the drama to testify against each other. The president has said he won't fire Moeller. However, Valliere said that wasn't "out of the question" if Trump's family members are indicted, especially for alleged crimes that have little to do with the original scope of the investigation. For example, former campaign manager Paul Manafort already is believed to be under investigation for money laundering activities that occurred a decade ago.

"Robert Moeller isn't going away," Valliere said. The former FBI director will remain a major figure on the Washington stage for 2018 and beyond.

Valliere considers it unlikely that the president will be removed from office, even though he now believes the Democrats have a better than 50 percent chance of retaking the House of Representatives in November.

Removing a president requires 67 senators to convict him of impeachment and the votes in the Senate won't be there. The last time a president was impeached was President Clinton in 1998 and a prolonged bull market in equities was oblivious to the proceedings.

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