Industry Updates

Alternative investment industry weighs in on the presidential election

Tuesday, August 16, 2016

Tweet
Print
Email
Track Keywords

Opalesque Industry Update - The U.S. presidential race has already dominated the news for well over a year and will undoubtedly continue to do so long after the final votes are cast on November 8th. Beyond predicting who will triumph, Wall Street, along with much of the world, is focused on what the winner’s presidency will mean for markets and the economy. From the makeup of the Supreme Court, to issues such as gun control and immigration, the outcome of the 2016 presidential election could have a significant impact for years to come. The New York Hedge Fund Roundtable recently surveyed its membership about the extremely contentious presidential race and what different scenarios would mean for the economy and the alternative investment industry.

Money, Politics and the 2016 Presidential Race was the topic of the Roundtable’s August event. “From highly sensitive issues such as gun control, to international relations and foreign trade to the future of our economy, it seems that the outcome of the 2016 presidential election will have major ramifications,” says Adam Weinstein, President of the New York Hedge Fund Roundtable and a managing director at asset management firm New Mountain Capital. “In what seems like an increasingly longer election cycle, there is still a long way to go and the lack of clarity has created some anxiety among investors as the election draws closer,” he says.

New York Hedge Fund Roundtable members had the opportunity to weigh in on this topic both at the Roundtable’s August event as well as through an online electronic poll.

*Of the respondents to this survey, 30% were fund managers; 16% were allocators; 10% were risk management or trading; 31% were service providers; and 13% were other industry participants.

Following are some of the other key findings of that survey:

Asked who they believe will win the presidential election, irrespective of who they plan to vote for, 57% of survey respondents believe Hillary Clinton will win; 30% believe Donald Trump will win; 11% think independent candidate Gary Johnson will win; 11% are undecided; and 2% are so disgusted with all the candidates that they do not even plan to vote.
When asked what one thing will have the greatest impact on the result of the president election, 44% of respondents said it will be the unemployment rate; 17% said it will be the candidate that attracts the most monetary contributions; 12.5% said it will be whether or not the Federal Reserve decides to raise rates before November; another 12.5% believe it will come down to where stocks are trading in the month before the election; 8% believe endorsements from high profile individuals within the entertainment industry will carry the most weight; and 6% believe it will be the support of President and Mrs. Obama.
54% of respondents believe that Hillary Clinton would be better for employment, with 46% selecting Donald Trump as the better prospect for employment.
55% of respondents think a Hillary Clinton presidency would be best for the investment management industry, versus 45% of respondents who think Trump would be best.
When asked how a victory by Hillary Clinton would most impact the economy, 31% of respondents think that Wall Street oversight would be heightened through the expansion of Dodd-Frank; 27% think the promise of increased infrastructure spending would give a boost to the construction, building materials and technology sectors, as well as the municipal bond market; 21% think a push for an increase in the federal minimum wage and paid leave for childcare would negatively impact equities; 13% think Clinton’s pro-business and pro-trade stances would give a boost to the equity markets; and 8% think tougher restrictions on companies seeking favorable tax treatment in foreign countries would keep more jobs in the U.S.
When asked how a victory by Donald Trump would most impact the economy, 29% of respondents think that efforts to renegotiate U.S. debt would depress the value of the dollar and disrupt worldwide markets; 25% think that attempts to renegotiate trade deals would significantly increase manufacturing jobs in the U.S.; 19% think that, if enacted, Trump’s immigration policies would cause civil unrest among our minority communities and lead to exportation of lower wage jobs; 15% think that if Trump builds a wall along the southern border of the U.S. it will increase the national debt; and 12% think that promises to decrease U.S. dependence on foreign energy would give a boost to renewable energy markets.
Asked what impact the outcome of the presidential race will have on the stock markets in general, 26% of respondents believe it will be a non-issue; 23% of respondents believe a Trump win would hurt the stock market; 21% think the presidential race will negatively impact the market, regardless of who wins; 13% think a Trump win would be a boost for the stock market; 11% think a Clinton win would be a boost for the stock market; and 6% believe a Clinton win would hurt the stock market.

August’s “bonus” question: Given the fact that people who work on Wall Street are rarely able to use all the vacation time they receive, Roundtable members were asked how much unused vacation time they currently have. 39% of respondents have a week or less vacation time remaining; 38% have two weeks; 6% have 3 weeks; 7% have a month and 10% of respondents said they have had to roll over so much vacation time over the years that it would require an Excel spreadsheet to calculate it.

Article link