Wall Street is terrified of President Trump

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Wall Street Prepares For Battle With Trump

The March 1 primaries are history, and whether you think the Republican voting populace turned it into Stupid Tuesday or Soothsayer Tuesday, you might as well get used to the sound of this phrase, because it's now a very distinct possibility. Ready?

President Donald J. Trump.

Increasingly it looks like 2016 will give America the most surreal election it's ever seen: A former first lady married to an impeached ex-president squaring off against a billionaire reality TV show star. But if you've got money riding on this – and we're not talking Las Vegas bets here – you're likely less concerned with the outcome per se as what it's going to do to your portfolio.

While Trump may be rich, he's not going to send you lucre should the market head south. In other words: Don't expect a big check, but rather a big reality check.

"From an economic and market point of view, a Trump presidency would be a disaster," says Barry Randall, technology portfolio manager for Covestor and a registered investment adviser in Boston. "But it's less of one if the Democrats retake the Senate and possibly the House."

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Wall Street is terrified of President Trump

Kid Rock

Kid Rock showed his support for the presidential hopeful in an interview with Rolling Stone, saying he's "digging Trump." He also added, "Let the motherf---ing business guy run it like a f---ing business. And his campaign has been entertaining as shit."

Photo via AP

Mike Tyson
 

The former heavyweight champion announced that he would endorse Trump while appearing on HuffPost Live back in October of 2015. "He should be president of the United States," Tyson said. 

As for what Trump has said about immigration, Tyson said the words were "crude" and someone could work with him on the delivery of his message.

Photo via AP

Stephen Baldwin


Baldwin, who was fired by Trump on two different seasons of "The Celebrity Apprentice," said during an interview with Don Lemon on an episode of "CNN Tonight" that Trump would make a "great" president "because he's not a politician, and he doesn't care what anybody thinks."  

Photo via Getty

Gary Busey

The actor endorsed Trump back in 2011, even after being fired from season four of "The Celebrity Apprentice," and offered his praise for the presidential hopeful again recently. "He's a great guy. He's sharp. He's fast," he told Fox411. "He can change the country after the last eight years."  

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Dennis Rodman

The retired pro-basketball player tweeted: "@realDonaldTrump has been a great friend for many years. We don't need another politician, we need a businessman like Mr. Trump! Trump 2016." He was fired from season two of "The Celebrity Apprentice." 

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Lou Ferrigno

When asked by TMZ for his thoughts on Trump, the actor and former bodybuilder said, "I hope Donald goes all the way." He was also fired from a season of "The Celebrity Apprentice." 

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Hulk Hogan

TMZ asked Hogan which 2016 Republican presidential candidate he would want to face in the ring, but instead of answering the question, he said he'd want to be Trump's running mate. 

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Ted Nugent 

The musician wrote an article for WorldNetDaily in which he said, "[Trump] should be given the Medal of Freedom for speaking his mind in such a bold, honest, and straightforward manner."

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Tila Tequila 

The model and reality star posted a video on YouTube expressing her support for Trump.

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Wayne Newton

The Las Vegas entertainer announced his support on "Fox and Friends," “I love Donald, and he would make a great president,” he said. But he also voiced his support for other hopefuls, such as Carly Fiorina, Jeb Bush, and Ben Carson. 

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Willie Robertson

The businessman and star of A&E’s “Duck Dynasty” supported Trump at a rally in Oklahoma last year, where he was invited up on stage. He officially announced his endorsement in January. 

Photo via Getty

Jesse Ventura 

Jesse Ventura

The former pro wrestler, former Minnesota governor, and actor was speaking with previous Trump staffer Roger Stone for "Off the Grid," when Ventura said, "I shocked my staff today. I came in and said, ‘You know what, as far as the Republicans are concerned, I hope Trump wins.'" Though he also added, "Now I’m not a Republican — I’m not a Democrat either — so ultimately, I’d like somebody else to win overall.”

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Charlie Sheen 

After initially calling Trump a "shame pile of idiocy" in a tweet, Sheen had a change of heart a month later and tweeted that he'd be Trump's "VP in a heartbeat!"

Photo via AP

Ivana Trump

The socialite held a luncheon in support of her ex-husband. 

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Mike Ditka

The retired NFL coach said of Trump, "I think that he has the fire in his belly to make America great again and probably do it the right way," in an interview with the Chicago Sun-Times. 

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Terrell Owens 

The retired NFL wide receiver told TMZ Sports, "This may be what the country needs and Trump... He’s a guy who won’t put up with B.S. and has what it takes to change how government is run." He appeared on the most recent season of "The Celebrity Apprentice."   

Photo via Getty 

Azealia Banks

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Jesse James 

James, a TV personality and founder of West Coast Choppers, posted a lengthy Facebook message in January supporting his former "Celebrity Apprentice" boss. He said:

 "Ive met a lot of people in life and I have found it best to form opinions about them by actually meeting them in person. ... What I personally observed is a man that is perfect suited to run this country. ... One thing you know about me is Good or bad I will always tell it like it is. This guy is the Real Deal, and will Make America Great Again."

Photo via AP

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While the scenario might not make sense, "The stock market typically thrives with political deadlock," Randall says. "But categorically, Wall Street hates uncertainty. Trump defines uncertainty because even he doesn't seem to know what's going to come out of his mouth."

That view gets the vote of Gary Tobin, a former journalist and now the principal of Tobin & Associates in San Rafael, California. "The problem for Wall Street would be that he lacks any particular economic philosophy and is not predictable. He seemingly makes decisions and lays out proposals like a Roomba cleaning a floor: bouncing from one place to another."

But for now, at least Trump played his Roomba card (or his trump card, if you prefer) mopping the floor in those Super Tuesday primaries. Surely the voters, having spoken, must know something market observers don't, right?

Not necessarily, especially when it comes to who's best for business. "We don't believe that Trump represents something good for America," says David L. Bahnsen, managing director and partner of HighTower and based in Newport Beach, California. "The question is, which candidate is most likely to deliver a pro-growth policy paradigm?"

And in terms of certain sectors, it doesn't matter which Super Tuesday big winner, Trump or Hillary Clinton, lands in the White House. "With both candidates, we believe health care and biotech are vulnerable, as they're making veiled and non-veiled threats to pursue price controls," Bahnsen says. "With Trump, his economic nativism makes multinational companies who rely on lots of global trade vulnerable ... and the Hillary Clinton of 2016 is running as anti-bank, anti-big pharma, and anti-free markets."

Trump's business background might make him appear the more preferable choice, but that's a surface reading at best. "President George W. Bush was also promoted as a successful businessman on his way into office, thanks to his Harvard MBA and his ownership stake in the Texas Rangers baseball team," Randall says. "But those business skills never seemed to play a role in America's economic growth."

"In my view, Wall Street would be very uncomfortable with a Trump victory," says Paul Bennett, a clinical professor of finance and business economics at Fordham University's Gabelli School of Business and former chief economist at the New York Stock Exchange.

Bennett sees two downsides to a Trump win. "First, Trump is very unpredictable and would cause problems for the U.S. throughout the world. Second, investors and traders in general would not view Trump as a Wall Street insider, or even a broadly sophisticated businessman, since his most visible business is so idiosyncratic and self-promotional."

Yet it wouldn't even take a Trump victory to make markets nervous: just a whiff would be enough. "Markets will be weakened as the probability of Trump victory rises," Bennett says, noting that Clinton might actually be the preferable candidate on that score. "Hillary would be better for Wall Street because she is not an ideologue and is unlikely to take big steps to rein in Wall Street."

Indeed, it might be better if Trump's stump speeches steer from controversy and talk about maintaining the vitality of a stock market that can still see the wreckage of the Great Recession in the rearview mirror. Bennett believes that a Trump victory would have one very weak silver lining: "Export dependent industries might be relatively helped if the U.S. dollar tanks on a Trump victory."

And as for investors' concerns abroad, "Trump's isolationist and protectionist rhetoric would not bode well for other countries' economies or their capital markets if he were elected," Randall says.

So in the meantime, you may want to hang on to your long-term investments like a roller-coaster bar – and for those get-rich-quick types, there's no worse time for market timing than election time.

"The period from the convention through the election will tell us a lot more," Bahnsen says. "Our opinion is that if this develops into a Hillary versus Trump race, the market will spend the second half of the year pricing in a Hillary victory. If we end up being wrong about that – in other words, if Trump really can beat Hillary – that will be the tale the Street has to price in."

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Wall Street is terrified of President Trump
NORTH CHARLESTON, SC - JANUARY 14: Republican presidential candidates (L-R) Donald Trump and Sen. Ted Cruz (R-TX) participate in the Fox Business Network Republican presidential debate at the North Charleston Coliseum and Performing Arts Center on January 14, 2016 in North Charleston, South Carolina. The sixth Republican debate is held in two parts, one main debate for the top seven candidates, and another for three other candidates lower in the current polls. (Photo by Scott Olson/Getty Images)
Republican presidential candidate, businessman Donald Trump speaks with the moderators as Republican presidential candidate, Sen. Ted Cruz, R-Texas, looks on during the Fox Business Network Republican presidential debate at the North Charleston Coliseum, Thursday, Jan. 14, 2016, in North Charleston, S.C. (AP Photo/Chuck Burton)
Republican presidential candidate, businessman Donald Trump, left, speaks as Republican presidential candidate, Sen. Ted Cruz, R-Texas, speaks during the Fox Business Network Republican presidential debate at the North Charleston Coliseum, Thursday, Jan. 14, 2016, in North Charleston, S.C. (AP Photo/Rainier Ehrhardt)
Republican presidential candidate, Sen. Ted Cruz, R-Texas, speaks as Republican presidential candidate, Sen. Marco Rubio, R-Fla., left, and Republican presidential candidate, businessman Donald Trump gestures during the Fox Business Network Republican presidential debate at the North Charleston Coliseum, Thursday, Jan. 14, 2016, in North Charleston, S.C. (AP Photo/Chuck Burton)
Republican presidential candidate, businessman Donald Trump speaks as Republican presidential candidate, Sen. Ted Cruz, R-Texas, looks on during the Fox Business Network Republican presidential debate at the North Charleston Coliseum, Thursday, Jan. 14, 2016, in North Charleston, S.C. (AP Photo/Rainier Ehrhardt)
Republican presidential candidate, Sen. Ted Cruz, R-Texas, right, speaks as Republican presidential candidate, businessman Donald Trump looks on during the Fox Business Network Republican presidential debate at the North Charleston Coliseum, Thursday, Jan. 14, 2016, in North Charleston, S.C. (AP Photo/Rainier Ehrhardt)
Republican Presidential candidate businessman Donald Trump (L) speaks next to Texas Senator Ted Cruz during the Republican Presidential debate sponsored by Fox Business and the Republican National Committee at the North Charleston Coliseum and Performing Arts Center in Charleston, South Carolina on January 14, 2016. / AFP / TIMOTHY A. CLARY (Photo credit should read TIMOTHY A. CLARY/AFP/Getty Images)
NORTH CHARLESTON, SC - JANUARY 14: Republican presidential candidates (L-R) Donald Trump and Sen. Ted Cruz (R-TX) participate in the Fox Business Network Republican presidential debate at the North Charleston Coliseum and Performing Arts Center on January 14, 2016 in North Charleston, South Carolina. The sixth Republican debate is held in two parts, one main debate for the top seven candidates, and another for three other candidates lower in the current polls. (Photo by Scott Olson/Getty Images)
2016 Republican presidential candidates, from left, Senator Marco Rubio, a Republican from Florida, Donald Trump, president and chief executive of Trump Organization Inc., and Senator Ted Cruz, a Republican from Texas, arrive for the Republican presidential candidate debate at the North Charleston Coliseum in North Charleston, South Carolina, U.S., on Thursday, Jan. 14, 2016. The sixth Republican debate comes at a time with less than three weeks before Iowa caucus-goers cast the first votes of the 2016 presidential election on February 1. Photographer: Andrew Harrer/Bloomberg via Getty Images
LAS VEGAS, NV - DECEMBER 15: Republican presidential candidates Donald Trump (L) and Sen. Ted Cruz (R-TX), interact at the conclusion of the CNN republican presidential debate at The Venetian Las Vegas on December 15, 2015 in Las Vegas, Nevada. Thirteen Republican presidential candidates are participating in the fifth set of Republican presidential debates. (Photo by Justin Sullivan/Getty Images)
Ted Cruz, right, makes a point as Donald Trump reacts during the CNN Republican presidential debate at the Venetian Hotel & Casino on Tuesday, Dec. 15, 2015, in Las Vegas. (AP Photo/John Locher)
LAS VEGAS, NV - DECEMBER 15: Republican presidential candidate U.S. Sen. Ted Cruz (R-TX) speaks during the CNN Republican presidential debate on December 15, 2015 in Las Vegas, Nevada. This is the last GOP debate of the year, with U.S. Sen. Ted Cruz (R-TX) gaining in the polls in Iowa and other early voting states and Donald Trump rising in national polls. (Photo by Justin Sullivan/Getty Images)
Republican presidential candidate businessman Donald Trump (L) pat the back of Texas Sen. Ted Cruz during the Republican Presidential Debate, hosted by CNN, at The Venetian Las Vegas on December 15, 2015 in Las Vegas, Nevada. AFP PHOTO/ ROBYN BECK / AFP / ROBYN BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)
Donald Trump, left, and Ted Cruz joke about remarks Cruz has made about Trump's temperament during the CNN Republican presidential debate at the Venetian Hotel & Casino on Tuesday, Dec. 15, 2015, in Las Vegas. (AP Photo/John Locher)
MILWAUKEE, WI - NOVEMBER 10: Republican presidential candidate Donald Trump (L) and Ben Carson (C) looks on as U.S. Sen. Ted Cruz (R-TX) speaks during the Republican Presidential Debate sponsored by Fox Business and the Wall Street Journal at the Milwaukee Theatre on November 10, 2015 in Milwaukee, Wisconsin. The fourth Republican debate is held in two parts, one main debate for the top eight candidates, and another for four other candidates lower in the current polls. (Photo by Scott Olson/Getty Images)
Donald Trump, left, and Ted Cruz shakes hands at the start of the CNN Republican presidential debate at the Venetian Hotel & Casino on Tuesday, Dec. 15, 2015, in Las Vegas. (AP Photo/Mark J. Terrill)
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