2024 US presidential election: Wall Street cautious as Donald Trump-Kamala Harris election raises economic concerns

Many Wall Street executives have reservations about supporting either candidate in the election US presidential electionshe was worried that the former president Donald Trumppolicies will hurt the economy, but be careful, vice president Kamala Harris leans too far to the left.

While many influential Wall Street figures, including Bill Ackman, John Paulson and George Soros, have endorsed the candidate, according to interviews with many other senior executives, economic policies central to the bitter race war and their consequences continue to be considered. for legal and democratic institutions. two dozen managers in recent weeks.

Many executives said that despite a track record in implementing Wall Street-friendly measures, Republican candidate Trump’s policies risk economic and political instability.

While Harris would be a safe pair of hands, she was only the Democratic nominee since late July, when President Joe Biden withdrew from the race and remains a great unknown, they said. Many fear the vice president will continue Biden’s regulatory actions against lucrative Wall Street companies.

The executives included Republican and Democrat supporters, including a handful who publicly support Trump or Harris, as well as others with no obvious partisan affiliation.

“Most expect Trump to continue where he left off, which is certainly to be more populist, protectionist and aggressively deregulatory,” said Bruce Mehlman, a partner at the nonpartisan lobbying firm Mehlman Consulting, which serves clients in all sectors.

“But they want to better understand who Harris is and what she believes in,” Mehlman said, adding that it didn’t appear Harris’s economic speech on Wednesday would provide much insight into Wall Street firms.

As in his first presidency, Trump promised tax and regulatory cuts, but most executives said the planned import tariffs could offset benefits that could trigger inflation and the tax cuts could increase the U.S. deficit. In comments this week, Trump raised planned tariffs.

Karoline Leavitt, national press secretary for the Trump campaign, said in a statement that Wall Street investors want Trump to win because they remember his policies “have fueled growth, lowered inflation and kept more money in everyone’s pockets.”

Billionaire investor and Trump supporter Paulson told Reuters on the sidelines of a September event in New York where Trump unveiled his economic plan in which tariffs would raise revenues, helping reduce the deficit.

Harris’ plan, which analysts say will be better for the economy, calls for tax increases, which will likely lower corporate profits and stocks, but will partially offset the expected increase in the deficit. She said little on financial policy, but as a former prosecutor, she touted her tough stance on banks and said she would continue Biden’s attack on hidden bank fees.

A Harris spokesman pointed to Reuters’ support from hundreds of economists and CEOs.

In an email to Reuters, billionaire entrepreneur and Harris supporter Mark Cuban noted that stocks rose as corporate taxes increased, and added: “Anything that is a step toward reducing the deficit is a plus.” But he said both candidates are making promises they may not be able to keep. “Neither candidate’s policies provide any details on how they will be adopted.”

For many companies, the best-case scenario is a Harris White House and a Republican Senate that would block tax increases and force Harris to choose moderate staffers for top jobs.

Securities and investment donors gave $8.7 million to the Biden/Harris campaign compared with about $3 million to Trump, according to Aug. 21 data from the nonpartisan donation tracker OpenSecrets.

These contributions, capped at thousands of dollars, come from individuals and political action committees (PACs) and are not comprehensive because there are several other ways to contribute money to support candidates.

STABILITY, POPULISM

In a nod to whiplash and personnel changes during Trump’s first presidency, his criminal conviction and role in the Jan. 6, 2021, attack on the U.S. Capitol, some executives also worried that Trump would undermine democracy and the rule of law. Some clear concerns about his positions on Federal Reserve independence, immigration and abortion.

Michael Bright, chief executive of the Structured Finance Association, a Washington lobbying group representing lenders and investors, said that beyond Jan. 6, some of his members held a grudge against Trump because of his role in overturning federal abortion rights during his presidency. .

“I would say that financial services voters are split pretty evenly,” said Bright, who Trump nominated in 2018 to lead the government housing agency Ginnie Mae. He added that many will vote “with their hearts” for Harris.

The next topic was the role of populism in personal elections. Several executives were concerned that Harris would stick with Biden’s progressive agency bosses, though several said they thought she might be friendlier to the industry than Biden.

“She’s practical and pragmatic,” said Jon Henes, Harris’ 2020 national campaign finance chairman and CEO of consulting firm C Street Advisory Group, adding that Harris believes in sensible regulation that provides transparency and certainty.

A more populist Trump and the Republican Party may choose inexperienced loyalists hostile to Wall Street to lead the agency, some executives say, although others believe he would re-elect traditional industry conservatives.

Some say Trump’s appointment of Cantor Fitzgerald CEO Howard Lutnick as co-chair of his transition team could be a good sign. Lutnick is using his network on Wall Street to staff a potential second Trump administration.

Lindsey Johnson, CEO of the Consumer Bankers Association, said Trump could “draw from a deep well of people who last served in the administration and who have extensive experience in the financial industry.”