Corporate America has reaped the benefits of a Trump presidency that produced lower taxes and regulations. But Wall Street and business leaders are just fine with former Vice President Joe Biden, with some prioritizing a steady set of hands after the turmoil of the Trump era.
“There is a growing sense that for business to do well, [and] for the economy to do well and to grow, you need a government that’s functional,” Harvard Business School professor Deepak Malhotra told me.
Typically, investors and business leaders wouldn’t be so sanguine about the prospect of Biden taking the White House, given his support for a higher corporate tax rate, stronger unions and an expansion of government-run health insurance.
Yet mounting exasperation with President Donald Trump — including his continued efforts to undermine the credibility of the election — has forced some to question the wisdom of backing him for a second term.
See here: A survey of CEOs conducted by the Yale School of Management in late September found that 77% of participants would vote for Biden. More than 60% predicted he would win.
Last month, Malhotra posted an open letter urging business leaders to publicly state what he claims many have said privately: that Trump “is unfit to lead” and poses a threat to the republic. The call to action has been backed by more than 900 business professors across the country.
“Policies change over time, pendulums swing left and right and it doesn’t get people as agitated,” he said. “This becomes an issue of morality.”
It helps that Biden isn’t perceived as being as threatening to business as progressives like Senators Bernie Sanders and Elizabeth Warren. The president’s pandemic response has also lost him support, with a majority of CEOs surveyed by the Yale School of Management giving his efforts a failing grade.
What’s really moved the needle, however, are concerns about Trump’s penchant for undermining democratic institutions, and his indication that he may not accept the election results if he loses, Malhotra said.
“If you are a US citizen, anything less than a vote for Biden is a vote against democracy,” Expensify CEO David Barrett warned in a recent note to the platform’s 10 million customers.
Watch this space: Last week, the powerful Business Roundtable lobby, together with groups such as the US Chamber of Commerce and the National Association of Manufacturers, put out an unusual statement urging Americans to “support the process set out in our federal and state laws and to remain confident in our country’s long tradition of peaceful and fair elections.”
“The peaceful and stable transition of power ― whether it is to the second administration of a president or a new one ― is a hallmark of America’s 244-year history as an independent nation,” JPMorgan Chase CEO Jamie Dimon wrote in a memo to employees obtained by CNN Business.
More to the story: Trump still has some prominent supporters in the business world. While Wall Street has donated $74 million to Biden, the oil and gas industry clearly favors the president, according to data from the Center for Responsive Politics. Trump has also received money this election cycle from casino mogul Sheldon Adelson and Oracle CEO Safra Catz.
Still, it’s notable that Biden has gained acceptance in the business and investing world in a race against the CEO president, who presided over significant stock gains in 2017 and 2019.
A UBS survey of 500 business owners and 1,000 investors conducted in mid-October found that 55% of business owners wanted Trump to win, while 51% of investors were backing Biden.
The takeaway: If there’s one thing Wall Street doesn’t like, it’s uncertainty. And even after four years, many still don’t know what they’d get with more Trump.
Either Biden or Trump will confront an economy struggling to dig itself out of a deep, dark hole — a top challenge for the next president alongside managing the pandemic.
The latest: The US economy grew at a record 33.1% annual rate over the summer following the end of spring lockdowns, but activity remains below where it was before Covid-19 hit.
Economists also caution that America is not out of the woods.
“It will probably be towards the end of 2021 before we return to previous levels of GDP, and if the next surge of Covid causes even more shutdowns, it will be longer than that,” said Ludovic Subran, chief economist for Allianz.
On the radar: Issues facing the US job market will be front and center next week, with the latest employment report arriving Friday.
Economists surveyed by Refinitiv predict that the US economy added 600,000 jobs in October. That would mark a slowdown from September. After shedding 22 million jobs in March and February, the economy still needs millions of positions to get back to where it was before coronavirus hit.
One positive: No matter who wins, the Federal Reserve, which meets next Thursday, is expected to keep its foot on the pedal. The central bank has provided record support for the economy, pushing interest rates to near zero and snapping up trillions of dollars worth of bonds. That’s not expected to change any time soon.
“We expect the Fed to remain status quo no matter what’s the outcome of the election,” Deepak Puri, Americas chief investment officer at Deutsche Bank Wealth Management, told me. “We don’t expect the monetary policy to change.”
Monday: ISM Manufacturing Index; Clorox, Estee Lauder, Marathon Petroleum, Mondelez and PayPal report earnings
Tuesday: US election day; Saudi Aramco earnings
Wednesday: ISM Non-Manufacturing Index; Hilton, Expedia Group, Hyatt and Qualcomm report earnings
Thursday: Federal Reserve and Bank of England meetings; US initial unemployment claims; Ant Group shares start trading; AstraZeneca, GM, Booking Holdings, Caesars Entertainment, GoPro, Live Nation, Peloton, Square, Uber, Yelp and Zillow earnings
Friday: US jobs report; CVS, Hershey, Marriott and ViacomCBS earnings
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