Mentions of Trump on earnings calls fall
President Donald Trump is being discussed less in conversations between issuers and investors than six months ago, amid lingering uncertainty that he can deliver on his campaign promises, according to research by FactSet.
Out of 374 S&P 500 companies that had completed their Q2 earnings calls by August 2, only 44 (12 percent) mentioned the words ‘Trump’ or ‘administration’ (in reference to the current government). At the same stage in Q4 2016, 181 of the 371 S&P 500 companies (49 percent) that had reported financial results used these words.
This represents a 76 percent decline in the number of companies making reference to the now-president.
‘The decline in Trump citations over the past six months may be a sign that corporations are less confident today relative to the start of the year that the policies proposed by president Trump will be enacted in the near future,’ John Butters, senior earnings analyst at FactSet, writes on the company’s website.
Tax, regulation and trade policy were the most talked about subjects related to Trump’s administration, but mentions of all three have dropped significantly compared to six months ago. Tax policy was mentioned 16 times in Q2 2017, compared to 100 times in Q4 2016 – an 84 percent decline. Mentions of regulatory change fell from 69 to 15, while trade policy fell from 67 to 13.
Morgan Stanley described investor outlook as ‘fragile’ on its earnings call on July 19. ‘The same questions around timing and achievability of the administration’s policy initiatives at the end of the first quarter remain unresolved as we enter the third quarter,’ said Jonathan Pruzan, Morgan Stanley’s CFO.
OmniCom Group also referenced the uncertainty surrounding Trump’s administration during its earnings call on July 20. ‘There was, I guess, the Trump bump and that has waned a little bit…The simple things that they said they were going to focus on and the difficult things they said they were going to do haven’t really materialized,’ said OmniCom CEO John Wren.
Tensions between the Trump administration and corporate executives surfaced this week in the aftermath of the Charlottesville protests. Several members of Trump’s manufacturing and jobs initiative council resigned in the wake of the president’s refusal to condemn white supremacist violence last weekend that left one dead and many more injured.
Trump announced on Twitter that he would be ending the manufacturing and jobs council, as well as the strategy and policy forum. The executives involved in these groups were coming under increased commercial pressure to step down, according to the Financial Times.