Here are some notes from our call with the Goldman Sachs Asset Management Team on January 31st, 2017.  The topic for this phone call was to discuss President Trump coming into office and to outline the phases of what he will need to accomplish:

  • Post election, the market is shifting from Globalism to Populism
  • Current approval rate of President Trump has shifted from 50/50 to 50% disapproval, 42% approval and 8% undecided.
  • Goldman believes there will be 3 phases post election:
    • Phase 1 is to confirm cabinet nominees.  At this time only 4 have been confirmed.  For reference at the same time period Bush had 15 confirmed and Obama had 13.  The thought is that it may take until March in order to get all of the cabinet members confirmed.
    • Phase 2 – Supreme Court Nomination
    • Phase 3 – Affordable Care Act to be re-appealed and replaced.  It will take 50 votes to re-appeal and 60 votes to replace.
  • Goldman sees very good opportunities within the Emerging Market and SMID International space as valuations look attractive.
  • Goldman is seeing quite a bit of support from the business community (large and small) in moving more toward a deregulated environment.
  • Below are some of the additional comments on various asset classes and market observations:
    • Equities should outperform Credit.
    • Believe inflation will start to come back to the market.
    • Emerging Markets should outperform Developed International.
    • Correlations among asset classes are beginning to show divergence.
    • Corporate Debt should outperform Government Bonds.
    • The U.S. Dollar should remain strong.