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RBC Poll: 70 Percent of Wall Street Thinks Trump Will Be Re-Elected

RBC Poll: 70 Percent of Wall Street Thinks Trump Will Be Re-Elected

By    |   Friday, 05 April 2019 02:51 PM

An overwhelming majority Wall Street insiders reportedly believe President Donald Trump wiil win re-election in 2020.

CNBC reported that while Joe Biden was viewed as the most stock market-friendly possible Democratic candidate for the White House, more than 70% of survey respondents told global investment bank RBC Capital Markets that they expect Trump to be reelected.

“Most expect Trump to win in 2020, but there’s still some nervousness around the event,” Lori Calvasina, RBC’s head of U.S. equity strategy, wrote to clients.

Sixty-seven percent “of our March 2019 survey respondents believe that Joe Biden is seen as the most acceptable Democratic candidate by the stock market for the White House. No other candidate got a significant number of votes,” CNBC quoted her as saying.

The survey was conducted after special counsel Robert Mueller gave the results of his investigation to the Justice Department; 141 equity-focused institutional investors were polled.

To be sure, Reuters has reported that there is a dilemma for Wall Street investors: how seriously to take comments from the White House and Trump's active Twitter feed.

On one hand, traders have long known that Trump’s bold pronouncements do not always hold, ultimately muting their effect on securities. On the other hand, market volatility has picked up in 2018, in part because of confusion over comments by Washington officials, making them harder to ignore.

“It’s a judgment call about which announcements should be taken seriously,” said Maria Vassalou, portfolio manager for Perella Weinberg Partners’ $685 million global macro strategy.

“This situation certainly creates unnecessary volatility and complications to the investment process.”

It is not just Trump. Unexpected comments from White House officials such as Treasury Secretary Steven Mnuchin and economic adviser Larry Kudlow have caused a stir with traders. Each man was cited by Reuters as a driver of market moves more than two dozen times.

Some investors have taken protection from White House-fueled volatility into their own hands.

Juan Gomez, head of hedge fund firm Black Swan Quantitative Advisors which manages $75 million in assets, said he has adjusted his options-focused models over the last two years to incorporate more protection against market volatility, partially in response to Trump administration comments.

“At this point you are expecting controversial headlines,” Gomez said. “At the beginning, it drove me crazy, but now it’s just part of what to expect.”

Katina Stefanova, head of Marto Capital LP which manages approximately $300 million, said her hedge fund firm had created a “Trumponomics” index of securities to help hedge the broader portfolio.

Stefanova said her fund’s profit this year – up about 7 percent in 2018 through November - would be around two percentage points lower without the index, which has recently focused on impacts of U.S. trade wars, such as Chinese technology stocks, U.S. industrial companies and Asian currencies.

“You still have to take the White House very seriously,” Stefanova said. “Inconsistency itself swings markets and affects sentiment.”

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An overwhelming majority Wall Street insiders reportedly believe President Donald Trump wiil win re-election in 2020.
wall street, donald trump, re election, rbc
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2019-51-05
Friday, 05 April 2019 02:51 PM
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