UTX United Technologies Corporation

By George Stahl 
 

Donald Trump's victory this week has forced investors and executives to try to predict the impact of his presidency on the business world. Below is a look at Mr. Trump's past financial comments and the perceived winners and losers under his administration.

 
What do we know about Mr. Trump's business policies? 

Mr. Trump's victory leaves large U.S. businesses bracing for revamped trade pacts and a potential crackdown on overseas operations, but also the promise of lower corporate tax rates and less regulation at home. Specifically, he has criticized big companies like Ford Motor Co. and United Technologies Corp. for moving jobs and operations overseas. He also has been critical of global trade pacts, like the North American Free Trade Agreement. In addition, Mr. Trump has proposed overhauling U.S. corporate taxes by reducing the corporate rate to 15% from 35%. His plan also provides for a one-time tax rate of 10% for repatriated corporate profits, which would help fund plans to spend on new infrastructure projects.

 
Which industries are seen as perceived winners? 

Bank stocks--both big and small--are seen benefiting from expectations of higher interest rates and less regulation. Mr. Trump in general has favored lighter regulation across industries, and he has criticized the Dodd-Frank regulatory overhaul as unnecessarily harsh on smaller banks. Construction-related companies--such as equipment makers, building-product suppliers and engineering firms--are seen getting a boost from his plans for spending on domestic infrastructure, which also helped trucking stocks. Defense stocks have rallied on the prospect of an increase in military spending; drug stocks were getting a bump on the diminished chance of government restrictions on drug prices; and stocks related to mining and metal companies rose on Mr. Trump's support for coal and reviving U.S. manufacturing.

 
Which industries are seen as perceived losers? 

Donald Trump has been a vocal critic of several big technology companies, and his advocacy of tighter limits on immigration and trade have alarmed an industry that prizes high-skilled immigrants and gets most of its revenue from overseas. Elsewhere, hospital and insurance companies that have benefited from the Affordable Care Act's expansion of Medicaid coverage saw their stock prices fall on fears a Trump administration could roll back that expansion. Auto makers, the shipping and rail industries, and other companies connected to importing and exporting slid on concerns about Mr. Trump's repeated support for trade protectionism. Also hurt was Hollywood, which was generally supporting Hillary Clinton and fears Mr. Trump's China-related comments, and the space program, which faces a possible revamp in spending.

 
Are there companies caught in the middle? 

Yes, for example, Mr. Trump spoke about helping the coal industry, but it isn't clear how coal will reverse the losses to natural gas. In addition, Mr. Trump is seen supporting new pipelines, helping the energy industry, but reversing power and climate policies, hurting wind and solar firms. Meanwhile, food makers and agricultural companies are seen benefiting from less regulation but getting hurt by possible trade restrictions. And small-business owners are excited by a Trump administration, but it's unclear how his immigration policies may affect hiring.

 
What are the unknowns? 

Ironically, the real estate sector--the industry most associated with Mr. Trump--could face pressure from higher interest rates, which may result from Mr. Trump's criticisms of the Federal Reserve's rate policy and his push for more fiscal spending. The real-estate sector is particularly sensitive to higher rates because of its reliance on borrowed money. As for telecom, many of Mr. Trump's positions remain unknown, although he has spoken out against AT&T Inc.'s buy of Time Warner Inc. as well as net neutrality. Likewise, the retail industry isn't sure about the potential impact from Mr. Trump's trade policies and whether his push for less regulation would include easing items like the recent overtime-pay rule.

(END) Dow Jones Newswires

November 10, 2016 13:22 ET (18:22 GMT)

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