Investment Bankers Start to Take Trump Literally

BANKS NEEDED THE right version of Donald Trump to justify their high-flying stock prices. They got the wrong one.

- Bloomberg

The US president's chaotic and aggressive performance during his first few weeks in the White House has shocked companies, put investment plans and deals on hold, and threatens to drag the economy into recession. Finance executives aren't hitting the panic button yet, but my impression from a string of meetings in New York last week is that bankers are coming to accept that this administration is serious about reshaping the economic and financial landscape.

In his first term, the advice was take Trump seriously but not literally—the second part is no longer true. The transformation he's planning during his second term will be painful; the questions are how much it will hurt and how long will it take.

The bright spot in next month's first quarter results will be investment banks' trading operations. The market volatility sparked by on-again, off-again tariffs and mounting fears of a slowdown has been a boon for equities desks as investors react to an erratic news cycle and seek a more defensive balance to their holdings. Goldman Sachs Group, JPMorgan Chase & Co, and Morgan Stanley will reap rewards from this, as could some European names such as UBS Group.