A Busy Week

Donald Trump re-elected as President of the United States

Summary: Last week was one of the busiest macroeconomic weeks in memory. The headline of the week was Donald Trump’s re-election as President of the United States. Markets are anticipating a corporate-friendly government and are rising, but we won't really know what the administration's priorities will be for some time. Either way, the election uncertainty has passed and that should help markets look forward. In addition, the Fed lowered rates by another 25bps. Confidence is ticking up.

---

Editor’s Note: We have reserved the sections after Macro for our premium subscribers. If you’re not a premium subscriber already, please consider subscribing.

---

Macro

The election is over
"We overcame obstacles that nobody thought possible and it is now clear that we've achieved the most incredible political thing, look what happened, is this crazy? But it's a political victory that our country has never seen before, nothing like this. I want to thank the American people for the extraordinary honor of being elected your 47th president and your 45th president. And every citizen, I will fight for you, for your family, and your future, every single day I will be fighting for you with every breath in my body, I will not rest until we have delivered the strong, safe, and prosperous America that our children deserve and that you deserve. This will truly be the golden age of America, that's what we have to have." — President-Elect Donald Trump

The end of uncertainty could boost economic activity
"I spoke to a couple of our portfolio company CEOs yesterday, and I would just echo the common theme was they feel like the election certainty, the removal of the election uncertainty will elevate confidence levels. And that obviously is -- that's good for capital markets and that's good for M&A. And all those things being better, stronger, we think it's good for our business." — Carlyle Group (CG 0.00%↑) CFO John Christopher Redett 

More and more, we live in our own reality
"More and more, we live in our own reality. And that reality is increasingly political. In September and even in October, a common source of anxiety among home-buyers has been the election, not just higher rates. With the election now over, many people who put off plans to buy or sell a home over the last two years may have run out of reasons to wait." — Redfin (RDFN 0.00%↑) CEO Glenn Kelman

Companies are trying to figure out what Trump will actually do
"I think if we look at Trump and if he introduces tariffs...I think that with a Trump administration, it's probably more likely that you'll see onshoring, possibly even nearshoring. I think you're going to have -- but even if that did happen, it takes time, right?" — Modiv Industrial (MDV-A) President, CEO & Director Aaron Scott Halfacre

Whoever wins it's not so much whoever wins
"Whoever wins it's not so much whoever wins it's what they said and what their actual policies would be, and I think that will also create some hesitation by both the consumer and companies to take forward their capital spending in the face of radically different policies that may or may not be enacted by the respective congresses." — Starwood Property Trust (STWD 0.00%↑) Chairman & CEO Barry Sternlicht

Listen, I think net-net
"Listen, I think net-net, pleased with the prospects of maybe less of a really, really heavy orientation in the regulatory environment... I think that our stock responded favorably. Other stocks responded favorably to the news, so maybe being a little bit less heavy-handed perhaps is the implication." — Zions Bancorporation (ZION 0.00%↑) EVP & CFO R. Ryan Richards

It's too early to know for sure
"Right now we’re—there’s nothing to—there’s nothing to model right now. It’s such an early stage we don’t know what the policies are. And once we know what they are we won’t have a sense of, you know, when they’ll be implemented, or all those sorts of things." — Federal Reserve Chair Jerome Powell

Trump's campaign policies would be inflationary
"You could have tariffs, which are on the margin, inflationary. Immigration has been a great boon to this country. Maybe not the way it was done, but it certainly enabled us to have growth without inflation and labor, materially the last two or three years." — Duquesne Capital President Stanley Druckenmiller 

But Trump could also bring animal spirits alive
"If Trump wins, you could have animal spirits from the business community who are dying for deregulation...the combination of animal spirits, recovery doing better than it is, I'm just open-minded to it." — Duquesne Capital President Stanley Druckenmiller

2017 was a pretty good year for the stock market
"We've seen clients engage on trades that worked following the 2016 election, which were long banks, long technology, long energy stocks...post the 2016 election, every bank out there was saying that 2017 was going to be a year of volatility, similar to what you're talking about. But 2017 actually was one of the lowest realized vol calendar years in the last 60 years." — Goldman Sachs (GS 0.00%↑) Equity Execution Head Brian Garrett

The Fed also cut rates last week
"Today, the FOMC decided to take another step in reducing the degree of policy restraint by lowering our policy interest rate by a quarter percentage point." — Federal Reserve Chair Jerome Powell 

The Fed still views the current policy as restrictive
"We think that even with today’s cut, policy is still restrictive. We understand it’s not possible to say precisely how restrictive, but we feel that it is still restrictive." — Federal Reserve Chair Jerome Powell 

The path forward is getting a little more murky
"We don’t think it’s a good time to be doing a lot of forward guidance. You know, we’re—there’s a fair amount of uncertainty in that—in what I’ve said. The path that we’re on, we do know where the destination is, but we don’t know the right pace. And we don’t know exactly where the destination is. So the point is to find that, to find the right pace and the right destination as we go. And I think there’s a fair amount of uncertainty about that. And, you know, you don’t want to tie yourself up with guidance. You want to be able to make sensible decisions as you go." — Federal Reserve Chair Jerome Powell 

The Fed is not in a hurry to get to neutral
"Nothing in the economic data suggests that the committee has any need to be in a hurry to get there." — Federal Reserve Chair Jerome Powell 

The Fed is not concerned about rising bond rates
"We’ve watched the run-up in bond rates...I will say, though, that it appears that the moves are not principally about higher inflation expectations. They’re really about a sense of more likelihood of stronger growth and, perhaps, less in the way of downside risks. So that’s what they’re about." — Federal Reserve Chair Jerome Powell 

Powell doesn't think Trump can pressure him into changing policy
"So let me say that in the near term, the election will have no effects on our policy decisions. As you know, many, many things affect the economy and anyone who writes down forecasts in their job will tell you that the economy is quite difficult to forecast, looking out past the very near term. Here, we don’t know what the timing and substance of any policy changes will be. We, therefore, don’t know what the effects on the economy would be, specifically whether and to what extent those policies would matter for the achievement of our goal variables, maximum employment, and price stability. We don’t guess, we don’t speculate, and we don’t assume." — Federal Reserve Chair Jerome Powell 

Confidence is ticking up
"Consumer sentiment, up in October. Up for the first time in over a year. So I think that is a good macro indicator of how consumers are feeling. From a liquidity perspective, the consumer remains strong." — Bank of America (BAC 0.00%↑) Head of Consumer Client Services Holly A. O'Neill

"I'd say in sum total, in recent events the last couple of days, feels like there's going to be more confidence." — Zions Bancorporation (ZION 0.00%↑) EVP & CFO R. Ryan Richards

"If I look at the macro, consumer confidence is high. It's actually the highest it's been in a number of months." — Choice Hotels International (CHH 0.00%↑) President, CEO & Director Patrick S. Pacious

"We saw some momentum in the second half of Q3 that gives us some confidence. And of course, we've seen that pick up in Q4 as well. That gives me the confidence that 1 will deliver against our guidance." — The Wendy's (WEN 0.00%↑) President, CEO & Director Kirk Tanner

"I think as people get more confidence that this soft landing scenario is what's going to play out, and I think that will encourage more and more activity." — Wells Fargo (WFC 0.00%↑) EVP & CFO Michael Santomassimo

"While it's still more of a wait-and-see economy versus a growth economy, it is one that seems to be turning more positive, and that's something that we feel good about." — BILL (BILL 0.00%↑) Founder, CEO & Director René A. Lacerte

International