What Does the Trump Election Mean?

A TabbFORUM Community Survey

TabbFORUM | December 2016

The bottom line

Industry believes banks will do significantly better under the Trump administration
They are very worried about global financial stability
Active & hedge funds strategies will perform better than ETFs & passive strategies
Energy, Equities, Metals & the US Dollar will outperform Credit and Rates
Volatility, trade barriers, and the risk of armed conflict will increase
Economic equality, odds of a balanced budget, international cooperation and
financial regulation will all decline
Many believe Dodd-Frank will be watered down
Social conservatism expected to increase while gridlock & social harmony will
decline
Two thirds believed Trumps business interested will create significant challenges
As for his campaign promises (according to PolitiFact):

There is interest in a southern wall but not in having Mexico pay nor banning Muslims
Half sample wanted to renegotiation Iran deal, more wanted to bomb ISIS but half thought we should
take oil
70% wanted to bring back manufacturing but only 46% thought we would/could
Industry very worried about trade, tariffs, and international treaties
While few wanted to repeal Obamacare, 60% wanted a market-based solution
65% wanted a tax cut but there was concern about paying for it as well as leaving social security alone

We sampled the community through TabbFORUM and

Twitter (from 11/28-12/1)
Participant Breakdown
100%=370
Regulator
2%

Academic
1%

Vendor
15%

Bank/Exchange/Bro
ker/Market Maker
28%

Buy-side
16%
Other / No
Entry
18%

Consultant
20%

Banks are thought to gain the most relief from a Trump presidency,
while industry most sanguine about global market stability
Impact on the Industry
100%
80%

8%
10%

15%
26%

60%

26%

19%

22%
22%

29%
18%

30%

16%
38%

49%

20%
22%

40%

82%

22%
59%

56%

55%

20%

53%

50%

0%

Positive
4

66%

Negative

No Impact

40%

29%

18%

Active investment strategies are expected to perform better than

passive
Impact on Investment Business Models
100%
22%

18%

14%

21%

30%

80%

51%

60%

30%

40%

19%
64%

36%

62%

20%

40%

0%

Help
5

42%

Hurt

No Change

30%

22%

Energy, Equities, Metals & the US Dollar are anticipated to outperform

Rates, Credit, Non-financial instruments, Agriculture, and Housing
Impact on Asset Classes
100%
80%

13%
19%

14%
21%

23%
16%

10%

10%

53%

54%

34%

36%

47%

31%
40%
26%

17%
68%

65%

61%

58%
43%

20%

42%

0%

Positive
6

13%
32%

60%
40%

17%

Negative

No Change

35%

Volatility, trade barriers & risk of armed conflict to increase while economic equality,
odds of a balanced budget, international cooperation and financial regulations to fall

Impact on Macro Economic Climate

100%

6%
4%

10%

10%

80%

12%

12%

18%

13%

8%

59%

68%

77%

22%

19%

19%

11%

15%

27%

26%

60%
40%

89%

81%

86%

73%
61%

56%

20%
3%

0%

Increase
7

15%

Decrease

No Change

While industry views odds of Dodd-Frank repeal as high, odds of reinstating GlassSteagall is low. But social conservatism will increase, governmental gridlock will
decline, and national harmony / tranquility will evaporate
Future of Financial
Regulation

Macro Social/Governmental Issues

100%

100%
27%

4%

15%

80%

22%
80%

19%

47%

60%

20%
56%

60%

73%

40%

54%
40%

74%

25%

20%
25%
12%
0%

20%
28%
0%
Probability of
Probability of
repealing Doddreinstating
Frank
Glass-Steagall
Increase
8

Decrease

No Change

Increase

Decrease

No Change

62% of participants are worried that Trumps business interest will create significant
challenges for his presidency / administration
Will Trump's business interests create significant challenges for his
administration?
100%

80%

60%

40%
62%
20%

38%

0%
Yes
9

No

What does the industry think about Trumps top 10

campaign promises? (Promises according to PolitiFact)

10

While a wall on the southern boarder is popular, making Mexico pay and banning
Muslims is not. While 17% of respondents think we should ban Muslims, 27.5%
believe we will
Build a wall across southern boarder

Make Mexico pay for the

wall

100.0%

100.0%

Temporarily ban Muslims

from entering the US
100.0%

80.0%

80.0%
75.4%

80.0%

73.5%
60.0%

60.0%

60.0%

40.0%

40.0%

40.0%

27.5%
20.0%

20.0%

20.0%
18.3%
11.9%

1.8%

6.3%
0.0%

0.0%

0.0%
We Should We Will

Should >
Will

17.1%

We Should We Will

We Should We Will

Should >
Will
-20.0%

11

Positive = Respondents believe we should but thinks the administration wont follow through
Negative = Respondents believe we shouldnt but thinks the administration will follow through

Should >
Will
-10.4%

Roughly half the industry sample wanted a more aggressive Iranian / ISIS policy
but there is significant gap worried about bombing ISIS. Fewer thought we
would/could take ISIS oil
Renegotiate the Iran deal
100.0%

100%

80.0%

80%

60.0%

60%

52.6%

53.7%

Take the oil from ISIS

Bomb ISIS
100%

80%

72.9%
59.6%

60%
49.6%

40.0%

40%

40%

20.0%

20%

20%

39.8%

9.8%
-1.1%
0.0%
We
Should
-20.0%

12

0%

0%
We Will Should >
Will

We
Should
-20%

We Will

Should >
Will

We Should We Will

-13.3%

Positive = Respondents believe we should but thinks the administration wont follow through
Negative = Respondents believe we shouldnt but thinks the administration will follow through

Should >
Will

While industry want manufacturing jobs to come back, there are doubts that we can
and industry is very worried about trade/tariffs especially with China and Mexico
Bring manufacturing (jobs) back
100.0%
80.0%

Impose tariffs on goods made in

China and Mexico
100.0%

69.0%

60.0%

80.0%
60.0%

46.4%

40.0%

22.6%

40.0%

20.0%

20.0%

0.0%

0.0%
We Should

We Will

70.0%

Should > Will

-20.0%

30.3%

We Should

We Will

Should > Will

Positive =
Respondents
believe we should
but thinks the
administration will
not follow through

-40.0%
-39.7%

-60.0%

Renegotiate or withdraw - NAFTA

Renegotiate or withdraw - TPP

100.0%

100.0%

80.0%

80.0%

80.7%
64.4%

60.0%

60.0%

52.5%

41.5%
40.0%

40.0%

20.0%

20.0%

0.0%

0.0%
We Should

We Will

Should > Will

-20.0%

We Should

-22.8%
-40.0%
13

We Will

Should > Will

-20.0%
-40.0%

-28.2%

Negative =
Respondents
believe we shouldnt
but thinks the
administration will
follow through

Sentiment for repealing Obamacare is low, while replacing it with a market based
solution is much higher. While industry would like lower taxes, its worried about
debt, as well as not doing anything to solve Social Security long term solvency
Fully repeal Obamacare

Replace Obamacare with a

market-based alternative

100.0%
100.0%
80.0%

80.0%

60.0%
40.0%

60.0%

61.5%

40.0%

27.2%

26.1%

59.8%

20.0%

20.0%
-1.1%

0.0%
We Should

We Will

-1.7%

0.0%
We Should

Should > Will

We Will

Should > Will

-20.0%

-20.0%

Leave Social Security as is

Cut taxes
100%

100%
83.1%
80%

80%

65.3%

60%

60%

40%

40%

20%

20%

0%

0%
We Should

-20%
-40%
14

We Will

-17.8%

66.4%
45.6%

We Should

Should > Will

We Will

Should > Will

-20%
-20.7%
-40%

Positive =
Respondents
believe we should
but thinks the
administration will
not follow through

Negative =
Respondents
believe we shouldnt
but thinks the
administration will
follow through

What does the Trump election mean?

A TabbFORUM Community Survey

TabbFORUM | December 2016