- Wall Street is preparing for Donald Trump’s first 100 days when he returns to the White House.
- Some experts are predicting a flurry of executive orders from the start.
- Taxes, fees, deregulation and the national deficit are top of mind for money managers.
The stock market cheered after November’s election results as investors awaited a Donald Trump presidency that would boost the economy. Now, investors are poised to find out whether Trump can deliver on his campaign promises as he begins his first 100 days in office on Monday.
The first 100 days are a critical period for Trump to lay the foundations of his presidency. With a previous term already under his belt, Trump could enter the job much more quickly the second time around, some experts believe.
“We have a feeling he’s about to hit the ground running,” Mike Reynolds, vice president of investment strategy at wealth management firm Glenmede, said in an interview. “We wouldn’t be surprised if he has a stack of executive orders ready to go on day one.”
Below, market experts shared what changes and policies they are anticipating after Trump takes office.
Tax cuts will depend on Congress
The Tax Cuts and Jobs Act, which Trump passed during his first presidency, is set to expire at the end of 2025. With narrow Republican majorities in all three branches of government, it is likely that parts of large tax bill to be extended.
Trump campaigned on lowering the corporate tax rate to 15% for companies that manufacture their products domestically. If such a policy were to be adopted, mostly US-based areas of the market such as financials, industrials and utilities would see an increase, according to James Ragan, director of wealth management research at DA Davidson.
Technology companies, especially software, could also benefit, Ragan added: “I think it’s going to be a little bit more difficult, as a software company, to say where their product is made, but I think they could argue that it’s made in the USA if their work is here.”
George Cipolloni, portfolio manager at Penn Mutual Asset Management, thinks Trump will have a lot of support for his policies. However, less tax revenue means less government funding – and Congress ultimately holds the reins.
“Especially early on, he’s going to have a lot of support for anything he wants to do outside of tax cuts,” Cipolloni said of Trump. “Tax cuts are tricky because he’s going to have to find some spending to cut to make up for it.”
While tax cuts are generally good for economic growth, Cipolloni also warned of unintended consequences. “Pro-growth usually means more inflation,” he said. Especially after a hot CPI report in December, lower taxes may actually lead to higher prices for consumers.
The details of the tariff policy matter
Tariffs can be imposed via executive order, and a Republican Congress is unlikely to push them through, so investors should get quick answers on the details of Trump’s protectionist policies.
Investors have speculated whether Trump’s threats of a “foreign revenue service” are just a negotiating tactic – or whether he is about to bring down the hammer with blanket tariffs on all imports.
The economic impact of Trump’s tariff policy will vary greatly based on the details of the policy: A blanket tariff of 10% on all imports would be far more inflationary than targeted tariffs on specific countries, according to Reynolds.
Clyde Rossouw, portfolio manager at asset manager Ninety One, thinks Trump may not be bluffing. The Biden administration kept many of Trump’s tariffs the first time around, Rossouw noted. “The new administration can be encouraged as there does not appear to be any tangible evidence of a negative impact on the US economy,” he wrote in a recent note.
That’s worrying for large parts of the market, as the AI-led rally that’s fueling stocks wouldn’t be possible without the highly international semiconductor industry, largely based in Taiwan, Roussouw warned.
Others take a more optimistic view.
“We wouldn’t be surprised if he takes an incremental approach where he starts putting them in slowly,” Reynolds said. “It’s not out of the question that the real estate guy from New York is trying to negotiate a little bit here and maybe anchor expectations at the extremes.”
Disruption will drive markets
Wall Street is predicting a wave of deregulation that will boost many parts of the economy.
Trump has tapped Andrew Ferguson to replace Lina Khan as FTC chair, which could usher in a new era for Big Tech. Under Khan, the FTC has actively shut down proposed mergers and acquisitions and opened antitrust investigations into some of the biggest companies in the market, such as Amazon and Microsoft.
“We’ve seen a pretty tepid M&A environment over the last couple of years, and one of the things that correlates most with M&A activity is CEO confidence,” Reynolds said. “CEO confidence has been pretty high about the prospects for a Trump presidency, so we wouldn’t be at all surprised to see some sort of M&A rebound.”
Big Tech CEOs certainly seem excited, with the likes of Apple CEO Tim Cook, Amazon CEO Jeff Bezos and Alphabet CEO Sundar Pichai all planning private meetings with Trump. There is a growing list of businesses and executives who have pledged to donate $1 million to Trump’s inauguration fund.
Bryan Wong, portfolio manager at Osterweis Capital Management, sees a pro-deregulation administration as a tailwind for small-cap companies. He hopes that under Trump, there will be an increase in small-cap IPOs.
Cipolloni agrees: “One of the reasons is that it costs a lot to be a public company,” he said of the lack of small-cap IPOs in recent years. “Lower regulation would certainly help capital markets.”
DOGE may not be such a crazy idea
An Elon Musk-led government advisory agency with a memecoin namesake is not standard operating procedure, but some money managers are tentatively hopeful that DOGE can balance the budget.
The national debt is about $36 trillion. “I think you talk to anybody, they’ll admit there’s a lot of overspending in government,” Ragan said.
Cipolloni drew comparisons between DOGE and previous budget balancing initiatives such as the Pay-As-You-Go policy under former presidents George HW Bush and Bill Clinton, which required new budget proposals to be budget neutral or offset by cuts in existing programs.
Wong believes the DOGE could be an offset to pro-growth policies such as tax cuts and tariffs, both of which are likely to fuel inflation. Since Trump won the election largely because of voter dissatisfaction with elevated inflation, he will probably want to use the DOGE as a lever to reign in excessive government spending, which is also inflationary, Wong said.
“It’s hard to cut government spending, but I think the effort is genuine and I think they know they have to give something,” Wong told BI.
DOGE is in uncharted territory, but has the potential to reign in the runaway deficit, Ragan believes.
“You can cut Social Security without cutting benefits if you can identify wasteful agencies or services that are being provided behind the scenes, jobs that are redundant,” Ragan said. “There will be legal challenges along the way and it will probably get messy at times, but yes, I think there is potential to cut waste without taking away the benefits.”
