2016 will be remembered as a moment when the political status quo was radically altered with the unexpected election of Donald J. Trump. And against a backdrop of rising nationalism, protectionism, and public frustration, we now have a 45th President-elect who operates according to an entirely different set of rules.
While there is no shortage of opinions on what Trump may or may not do next, there is intense speculation on the impact his administration could have—together with a Republican Congress—on markets and portfolios. In their first of six reports in the new POTUS 45 series, CIO Wealth Management Research (CIO WMR) addresses the most critical issues facing Trump’s first 100 days and beyond through:
- An outlook of the likelihood of comprehensive tax reform, regulatory relief, major spending initiatives as well as global engagement (trade, immigration reform, and foreign policy)
- A detailed matrix on the
prioritizationand timing on each of these issues and how they’re expected to impact specific investment opportunities
- A breakdown of each of Trump’s cabinet appointees with relevant background and experience
- An exclusive interview with John Savercool, Head of the UBS U.S. Office of Public Policy on how closely Trump’s campaign proposals are expected to square with legislative reality
- Each incoming presidential administration has a finite amount of "political capital." Spend too much time and effort on one issue—or attempt to do too many things at once—and there simply may not be enough support left for other important priorities.
- The biggest priority will most likely be comprehensive tax reform focusing on: 1) lowering corporate tax rates 2) providing a tax break for the repatriation of foreign earnings and 3) both a lowering and simplification of the personal income tax code.
- Regulatory reform will likely take shape in three ways: the rescinding of executive orders, the passage of new legislation and selective defunding of agencies.
- A sizeable infrastructure spending program is expected to take a back seat to other priorities until late 2017 or 2018 with the bulk of funding coming through public-private partnerships leveraging tax credits.
- Talk to your UBS Financial Advisor about how to best incorporate these insights into your own investment strategy.