Wall Street Doesn’t Give a Damn about Donald Trump

What does Wall Street think about the possibility of a Donald Trump presidency? Does it think markets will crash next November? Will the U.S. dollar take a sudden dive? Will we see the United States enter a new era of isolationism, shutting itself away far beyond the wall the Republican candidate wants to build on the Mexican border?

Those are the questions I had in mind when I contacted François Trahan—a New York-based portfolio strategist and the co-founder of Cornerstone Macro, an independent research firm—once Donald Trump had been officially named the Republican Party’s presidential nominee in the November election.

In 2015, Trahan was once again named Wall Street’s No. 1 portfolio strategist by Institutional Investor magazine. It’s the ninth time in 12 years that the HEC Montréal business school graduate has landed at the top of this prestigious and very select ranking.

Interestingly, while a majority of Canadians—and people across the world—are becoming increasingly worried about a possible Trump presidency after the next American election, Wall Street, the global finance capital where Trump’s company headquarters are notably located, does not seem worried about this.

“Everyone is talking about it because it’s the best show on right now! We published studies about the businesses that would benefit or lose under a Trump presidency, but they didn’t generate a lot of interest,” said Trahan, who has been a portfolio strategist in New York for more than 20 years.

According to Trahan, if Wall Street’s large portfolio managers and financial decision-makers consider Trump’s official candidacy as a simple distraction, it’s because even betting websites only give the flamboyant businessman a 25 percent chance of winning the election.

“It’s around the same odds Nate Silver gives him,” said the manager, referring to the famous statistician who, during the 2008 election, accurately predicted the results in 49 out of 50 states, and who received a perfect score of 50 out of 50 states during the last election in 2012.

Crazy, Vague and Protectionist

As we know, Trump won the Republican nomination without any support from the party establishment, which has been very quiet since the beginning of the convention in Cleveland.

Even elected Republicans who attended and gave speeches were rather tight-lipped about their new leader, and preferred to attack their Democratic adversary, Hillary Clinton.

Former President George W. Bush, who is far from being the most liberal American, refused to publicly criticize Trump. But in an interview, he stated that he was worried about the three “isms” Trump promoted: protectionism, isolationism, and nativism.

Wall Street hasn’t had much of a reaction to Trump, but that may be because the Republican candidate hasn’t provided a lot of detail about his economic policies.

Though some believe, with good reason, that Trump is above all a crazy character who will say anything and everything, he is also extremely good at being vague about many subjects.

But we know one thing, since he has made many statements about it: He is an ardent protectionist, and is in favor of using tariffs to protect sectors of American industry that have suffered because of competition from overseas.

Trump would also renegotiate the North American Free Trade Agreement signed by Canada, the United States, and Mexico—the worst trade agreement of all time, according to him—and would not ratify the Trans-Pacific Partnership.

According to Trahan, this rejection of liberalized trade agreements would clearly cause a negative reaction in the markets if Trump were to be unexpectedly elected.

But we haven’t reached that point yet. And for now, Wall Street doesn’t give a damn that Trump was named the Republican nominee on Tuesday. It’s far from being the catastrophe that we mere mortals await with worry, and that some await with fear: a feeling that could last until Nov. 8.

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