The beginning of Trump 2.0 is not what Wall Street expected

The beginning of Trump 2.0 is not what Wall Street expected.

Traded was the slowest month in January for over a decade. a A valuable tax reduction Hedge funds and private equity companies were under threat. And a big bank I’ve grilled As to whether they “blame” a particular customer.

These complications were not part of Donald Trump’s plan when he was elected in November. Optimistic prediction round On the M&A boom, loose rules, and a more favorable approach to Big Wall Street companies in Washington, DC.

Instead, since the same month in 2014, bankers have concluded with the lowest number of M&A transactions announced in January and the lowest number of M&A transactions announced in the US, according to LSEG data.

Trump’s new antitrust police officer too signal In the second week of the administration, they said they had no intention of giving a free pass to a major merger by blocking potential unions between Hewlett Packard.HPE) and rival Juniper Network (JNPR).

and New uncertainty surrounding the president’s tariff plan Many companies are unsure when to make a big move, and what directional borrowing costs will be in the coming weeks or months.

“The uncertainty seen from a geopolitical perspective of visibility is uncertainty about tariffs. It certainly creates uncertainty that could degrade everyone’s ability to implement.”UBS), spoke to analysts on Monday while speaking at the UBS Financial Services Conference in Miami.

Elmotti also quickly pointed out that “it’s not a quarter or a month” to determine the year.

Certainly January can usually slower new trading times than the rest of the calendar.

“It’s no surprise that we don’t see a flood of responding to it a month and a half after the election. Goldman Sachs CEO David Solomon spoke about the M&A environment at the same event on Tuesday. .

Historically high level of corporate ratings could also play a role in the slow pace of deal-making to launch 2025, THL Partners co-CEO Scott Sparring told Yahoo Finance live.

“It was an unusual combination, and in itself may have suppressed some of the possible financial gains from certain types of M&As and certain types of transactions,” Sperling told Yahoo Finance live.

So far, the recession has not cut down large bank stocks.

Since the beginning of January, JPMorgan Chase (JPM), Goldman Sachs (GS), Citigroup (c) and Wells Fargo (WFC), which rose between 12% and 15% as of Monday (Bank of America)bac), and Morgan Stanley (MS) Between 6% and 9%. Everything surpasses major stock indexes in that period.

The story continues

The big unexpected development of Wall Street in the early weeks of Trump 2.0 is a high level of political heat.

President Donald Trump has publicly confronted the American bank.bac) CEO Brian Moynihan at the World Economic Forum over claims gaining traction in conservative circles: customers have been “ccused” because of personal beliefs or for being part of the crypto industry. He says he is there.

The president also appeared to include Jamie Dimon, CEO of JPMorgan Chase, in the conflict. JPMorgan and Bank of America are the two largest banks in the country. The companies denied claims that they would cut off service to customers over their personal beliefs.

“I don’t know if the regulators order it for Biden or what, but you, Jamie and everyone else, you open a bank to conservatives because what you’re doing is wrong. I hope that,” Trump told Moynihan in his question. Answer session.

The GOP was in the spotlight last week on issues that would be removed during hearings before Senate and House committees. Massachusetts Democrat Senator Elizabeth Warren It even signaled her support for the topicshe said she agreed to Trump.

However, banks remain optimistic and once regulators relax some of the requirements for banks to emit specific customers, fixing that issue could ultimately turn out to be positive for them It has sex.

They argue that US rules, such as the Bank’s Secret Act, block banks from dealing with customers deemed high risk, and require clearer regulations in that respect.

Industry lobbyists are pressing for it to happen. “An important part of the solution is to modify the regulatory structure,” a spokesman for BPI, a banking industry advocacy group, said in a statement from Yahoo Finance.

Lobbyists for the private equity and hedge fund industry may be unexpectedly busy this year after Trump revealed he wants to close the tax credit known as the fateful interest deduction.

This allows investment managers to pay a lower capital gains tax rate on income they receive from their compensation work. That’s not a small problem, and while many capital gains charge a 23.8% tax, the tax rate on normal wage income could be doubled.

“The President is committed to working with Congress to accomplish this.” I said last week.

David Hollerith is a senior reporter on Yahoo Finance, covering banking, crypto and other areas of finance.

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