Global Market Commentary

December 01, 2016

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Trump Taps a Turn-Around King

The Secretary of Commerce acts “as the voice of U.S. business within the President’s Cabinet.”  Trump’s pick for the post, Wilbur Ross, tells us something about the President-elect’s psychology.

Mr. Ross has bought and restructured steel, coal, telecom, and textile firms during a forty-year career as a banker and investor.  He has made his fortune turning around left-for-dead companies — particularly in U.S. industries hit hard by the “bad trade deals” whose criticism garnered critical support for Mr. Trump during his campaign.  More recently, he has searched for bargains and opportunities in down-and-out European financials.  Most important, he shares Mr. Trump’s conviction that crafting good trade deals is critical for the revitalization of American industry, and has long been a vocal critic of deals he views as damaging.

We’re encouraged that such an experienced and tough negotiator and speculator will be on Mr. Trump’s team.  He is clearly not a man who is opposed to trade, but one who is opposed to badly negotiated trade deals that are disadvantageous for U.S. industries and workers.  What we have seen him say — for example, that every trade deal should have a built-in “re-opener” to fine tune after five years — encourages us that if his influence prevails, the results will bring industrial employment back to the U.S. and improve the fortune of middle America’s blue collar workers.

We’ll carefully monitor his policies and proposals as we continue to evaluate the U.S. growth path under the Trump administration.

Investment implications:  President-elect Trump’s pick for Secretary of Commerce is encouraging: Wilbur Ross, an investor who has made a career finding and turning around left-for-dead companies, especially in industries hit hard by offshoring.  He has long shared Mr. Trump’s critical stance toward badly negotiated trade deals that have hurt American workers.  His appointment makes us continue to be optimistic that the Trump administration will not be anti-trade, but will be in favor of intelligently negotiated trade deals, and that its policies will help bring jobs back to middle America.  We remain bullish on U.S. banks and industrials — but only on dips.