Fra Zerohedge
according to a broad consensus of Wall Street analysts, Trump’s Tuesday address to Congress will likely offer more rhetoric than details on policy. Bank shares may move if Trump shows the economy is high on his priority list, and if he reaches across the aisle, which may signal his administration is capable of meeting its goals. Since Trump’s Nov. 8 election, the KBW bank index (BKX) has gained 28%, with top gainers including SVB Financial, BofA, Regions, Huntington and Zions.
Below is an excerpt of what select Wall Street analysts believe will emerge from Trump’s speech tomorrow:
COWEN (Chris Krueger)
- Speech may feature more optimism than the Inaugural’s pessimism; may be “more Shining City on a Hill than Country = Dumpster Fire”
- Trump’s “America First” rhetoric may be heavy on adjectives, light on policy details; probably won’t mention a border adjustment tax (BAT)
- Language in sync with Friday’s CPAC address is likely
CLSA (Mike Mayo, in email to Bloomberg)
- Investors want to see that the economy ranks high on the to-do list
- The further up Trump talks about the economy, the better it is for banks
- Comments related to deregulation, taxes, oversight and economic growth may all impact bank share trading
KBW (Brian Gardner)
- Doesn’t expect specific policy proposals; sees “broadly thematic” speech similar to inaugural address
- Tax reform discussion probably won’t contain details
- Watch for whether Trump reaches out to political opponents; if Trump strikes the right message, markets may rally on renewed optimism about administration’s ability to achieve pro-growth portions of its agenda
CAPITAL ALPHA (Charles Gabriel)
- D.C., Wall Street have differing expectations
- Capital Alpha expects little clarity on Affordable Care Act or BAT
- Investors “may settle” for less stridency on trade/immigration
BEACON POLICY ADVISORS
- Trump is still “a big picture leader,” and is unlikely to dive too deeply into policy details (despite promises from aides his remarks will be more focused than previous speeches)
- Speech will be written by Stephen Miller, who wrote Trump’s “dark, and policy non-specific,” inaugural address, and who’s likely more interested in Trump’s base than the media and Congress
- Watching for potential Democratic “outbursts”
