Stock Market

Trump's 'narrow election win' poses big risk for corporate tax cuts: Piper Sandler

Investing | Sat, Nov 09 2024 09:45 AM AEDT

1695367561_650d4189d32c8_1692951951_64e8658fe70f4_breaking_news_600.png
Image Source: Sivastatz

Investing.com -- Expectations for President-elect Donald Trump to roll out expansionary fiscal policies and extend U.S. economic exceptionalism have kept stocks on the up and up, but Piper Sandler is skeptical and believes Trump's narrow win and thin Republican margins in Congress will muddy path to pass major legislation including corporate tax cuts.

"Trump is an unpopular, lame duck president who won a narrow election against a weak opponent and has thin margins in Congress. Investors should not get carried away with what he can move through Congress," analysts at Piper Sandler said.

Trump's comeback victory, while remarkable, represents a "narrow election win along the lines of what George W. Bush and Barack Obama won in their reelection bids," they added.

Bush won 50.7% to John Kerry’s 48.3% and garnered 286 electoral votes in 2004. While Obama won 51.0% to Mitt Romney’s 47.2% in 2012 and scooped up 332 electoral votes.

Trump currently has 50.8% of the vote to Harris’ 47.5% and that lead "will shrink as more votes are counted in California," the analysts said.

The analysts cautioned investors against drawing overly optimistic conclusions from the election results, despite Trump's remarkable comeback victory.

While Republicans are likely to maintain control of the House, the analysts believe it "will be something very close to the slim four-seat margin they have today."

A slim majority in the House "presents a significant challenge to moving major legislation," they added. "As we have seen during the past two years, a majority of this size is a nightmare for the GOP leadership."

In the upper chamber of Congress, where Republicans have regained control after winning three seats in the election, the analysts stressed that "even with a few votes to spare in the Senate, almost everything will require 60 votes."

"We remain skeptical there will be a major tax cut or an expansionary fiscal policy. A cut in the corporate tax rate is highly unlikely," analysts from Piper Sandler said in a recent note.

Yet, there is a lot that Trump can do without Congress that will likely be welcomed by markets, particularly on the economic front. This includes extending the 2017 tax cuts, implementing his plan to increase tariffs, and reining in illegal immigration."

This article first appeared in Investing.com

World News

My Home Pathway Launches Homeownership Pilot Program With Support From Wells Fargo, TransUnion, Morgan Stanley, Invest Newark & LISC NY

NEW YORK, November 12, 2024 /3BL/ - In a groundbreaking initiative to foster homeownership and financial inclusion, My Home Pathway has launched ...

3BL | Wed, Nov 13 2024 06:15 AM AEDT

Read More
World News

Lower Carbon Products and Packaging Claims: A Certification Standard for Decarbonizing the Chemicals Industry

November 12, 2024 /3BL/ - Decarbonization within the chemical manufacturing sector has become one of the key challenges in moving toward net ...

3BL | Wed, Nov 13 2024 06:00 AM AEDT

Read More
PRNews

The Shaw Prize Award Presentation Ceremony 2024: 21 Years of Celebrating Excellence in Scientific Achievements

HONG KONG, Nov. 13, 2024 /PRNewswire/ -- The Shaw Prize presented its awards to five Shaw Laureates today at the 2024 Award Presentation ...

Cision | Wed, Nov 13 2024 05:50 AM AEDT

Read More
World News

From Veteran Friendly to Veteran Ready: Creating Opportunities and Building Partnerships for Military Talent

Originally published in International Paper's 2023 Sustainability ReportSpotlight: Honoring service, hiring veteransVeterans contribute a unique set of skills, experiences and backgrounds ...

3BL | Wed, Nov 13 2024 05:45 AM AEDT

Read More
World News

The Legacy of Commitment: Covia Celebrates Employee Milestones

At Covia, we are committed to providing an exceptional work environment. This commitment includes recognizing exemplary performance and contributions to ...

3BL | Wed, Nov 13 2024 05:40 AM AEDT

Read More