Inauguration Day is here. Some will celebrate, others will protest, but for the business community it is a moment to consider again what Donald Trump’s presidency will mean for the economic life of the country.
Trump may be controversial, but the peaceful transfer of power has been a hallmark of American democracy, set to continue this morning.
A ceremony at the U.S. Capitol is slated to begin 11 a.m., NPR notes, with the actual swearing-in taking place around noon and Trump’s inaugural address to follow. A parade to the White House will begin at 3 p.m.
As the pomp and circumstance of this deep-rooted American ceremony gets underway, here is what you need to know.
Stocks and banking
The stock market rally that followed Donald Trump’s election continued into Inauguration Day, with the S&P 500 seeing its biggest election-to-inauguration gain today since Bill Clinton was elected to his second term in 1996, according to MarketWatch.
The Dow Jones Industrial Average was up 103 points Friday morning, the S&P was up 11 points and the Nasdaq Composite climbed 28 points, MarketWatch reported.
Also according to MarketWatch, between Trump’s election in November through today, the S&P 500 has gained 5.8 percent. Barack Obama’s president-elect phase in 2008-09 saw a 19.94 percent drop, said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
“Obviously it’s been a phenomenal run in the market,” said Bill Stone, chief investment strategist for PNC.
The initial excitement has moderated somewhat since then, he noted, which is typical.
Some analysts consulted by MarketWatch also feel the bull market will continue, regardless of any “Trump angst.”
Investors have hoped Trump’s presidency, and the Republican sweep in the legislature, would shock the economy back to life after the past few years’ sluggish economic recovery. Uncertainty about Trump’s policies, and his general unpredictability, however, have likely left many investors parsing through his inaugural address for indications of what might come next.
If Trump and his Republican colleagues follow through on a pro-growth agenda, the U.S. might not see another economic recession until 2019, said Linda Duessel, a senior equity strategist with Federated Investors, a Pittsburgh-based financial services company. She spoke at the Lancaster County Chamber of Commerce Economic Forecast Breakfast in December.
But that doesn’t mean anyone should expect exponential growth either.
Here is what a Lancaster County hedge fund manager had to say recently about market activity and taking the long view.
The banking industry, meanwhile, has looked hopefully to Trump to follow through on campaign promises to roll back regulations, especially ones affecting community banks. Trump, however, has been vague about how he plans to do that.
The S&P 500 has traditionally proven less forgiving toward Republican presidents in their first 100 days than it has Democrats, MarketWatch noted earlier this week. The S&P has fallen an average of 0.4 percent under the past five Republican presidents, while it has gone up 3.5 percent under the last six Democrats.
The past 11 new presidents have seen a roughly 4 percent decline in S&P almost 75 percent of the time, Stone said, but those numbers have been up an average of 7 percent by the end of each new president’s first year.
Mortgages, M&A
The new administration is reviewing recent actions taken by the Obama administration, including a move that would expand the pool of U.S. homebuyers.
Mortgage rates, meanwhile, have been rising since the election, including in York County.
It also has been predicted that Trump’s presidency could displace some mergers and acquisition activity this year.
Regulations, healthcare
Prominent business owners, including Pottsville beer king Dick Yuengling, have expressed optimism about a Trump presidency and the positive impact the new president could have on business taxes and regulation.
At the same time, Trump’s promise to repeal Obamacare — a goal shared by Republicans in Congress — could leave some entrepreneurs feeling the pinch. The fact that enrollment was rising as repeal neared also could lead to pain and complications across the nation.
Manufacturing and trade
But trade policy has been one of Trump’s signature issues — perhaps the issue — and this is an area where the nation and the world will be watching closely.
Trump rode to his party’s nomination with promises of eliminating or renegotiating trade deals — blaming them for a steep decline in U.S. manufacturing jobs — and imposing high tariffs on consumer goods imported by companies that outsourced production to other countries. It was a message he repeatedly hammered home during the general election.
Trump already has claimed responsibility for decisions by U.S. companies to reshore or add jobs, including Sprint and General Motors.
Expect some fact-checking on such claims. But at the same time, organizations such the Federal Reserve Bank of Philadelphia are independently noting manufacturing growth in our region, which has continued since late last year.
