Trump gets stock market thumbs-up, reveals IR Magazine study

May 01, 2019
But some misgivings exist, especially over the longer term

US President Donald Trump may be the most politically divisive president in history, but a survey of US investors and analysts carried out by IR Magazine finds he has – overall – been good news for the US stock markets.

As part of the research carried out for the IR Magazine Investor Perception Study – US 2019, participants were asked: Do you think President Trump’s policies have been good or bad for the stock market overall? Sixty percent responded positively, saying he had been good for the market.

But there are some provisos: some respondents express misgivings, especially over the longer term, noting that trade wars may develop and these would have a negative impact.

So when asked whether they expect Trump’s policies to continue to be good for the stock market, there is a more divided opinion, with 46 percent saying they would be good, 11 percent saying they would not, but a substantial share – 43 percent – saying ‘time would tell’, highlighting a strong element of uncertainty in Trump and his future policy approach.

Delving deeper into Trump’s policies, when asked whether specific policies are good or bad for the stock market, tariffs are cited as bad by 53 percent of respondents, with 13 percent saying they are good and 34 percent asserting time will tell.

‘Tariffs and trade issues mean there are tensions mounting on a global scale. Trade concerns are detrimental to the market,’ notes one respondent.

Conversely – though probably not surprisingly – when asked about tax cuts, 82 percent of respondents say these are good, 5 percent say they are bad and 13 percent say time will tell. ‘Corporate and personal tax cuts and deregulation are good for GDP. You just can’t argue with the figures,’ observes a respondent.

Commenting on the findings, Brian Riedl, senior fellow in budget, tax and economics at the New York-based conservative free-market think-tank Manhattan Institute for Policy Research, tells IR Magazine: ‘Clearly the 2017 tax cuts helped the market – even if much of the growth happened before the tax cuts were implemented because investors were anticipating the effects. Corporate tax reform in particular will make American companies much more competitive abroad, and that can only help.

‘On the flip side, tariffs have clearly hurt – as evidenced by a 3,000-point drop in the Dow Jones Industrial Average after the president declared himself a tariff man.’

Riedl adds that the study findings overall reflect a positive US market and economic outlook: ‘The Congressional Budget Office has already increased its overall estimate of the 2017-2024 real GDP by $3.3 tn since President Trump took office. The economy has exceeded expectations, with 4 percent unemployment, 3 percent real wage growth and 3 percent GDP growth.’

IR Magazine’s research was carried out among portfolio managers and analysts to identify the companies that are currently the leading exponents of investor relations in the US. The 2019 winners of an IR Magazine Award for best overall investor relations in the US were JPMorgan Chase & Co (large cap), Hasbro (mid-cap) and Hannon Armstrong (small cap).

The IR Magazine Investor Perception Study – US 2019 can be accessed here.

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