Is the media’s Donald Trump obsession good for markets and democracy? You bet, says one Wall Street insider… so long as all the attention actually results in real action.
FOX Business Network anchor Trish Regan says many had “too much complacency” over the last few years, and the current environment in 2017 is a kind of wake up call.
But she also adds that the response since Election Day “shows you how resilient markets are,” and how investors and businesses can find a path to a brighter future if they keep their heads and keep their priorities straight.
Regan is a well-known markets expert with over 15 years’ experience in financial media, so she should know. Regan joined FOX Business Network as an anchor and markets reporter in 2015, and is currently the anchor of The Intelligence Report with Trish Regan which airs at 2 p.m. EST.
The rising FBN star spoke with InvestorPlace.com recently about Trump, where the markets are headed and more. Here’s what she had to say:
IP.com: Politics and Donald Trump seem to dominate the news cycle these days. Do you think that’s ultimately a good or a bad thing?
Regan: It’s a good thing — provided the president and Congress are able to get what they need accomplished done. What I like is that the focus on Washington is putting pressure on lawmakers to generate some economic policy reforms. For too long, the market was overly dependent on the Fed, and that dependence lent itself to too much complacency. My hope is that the market is weaning itself off of the Fed’s easy money policy and shifting its attention to real reforms.
IP.com: Elections always matter, but this last one was a doozy. What is the biggest surprise you’ve seen in how investors big and small have reacted over the last several months?
Regan: A lot of investors were stunned that Donald Trump won. They hadn’t positioned their portfolios for a Trump win and, since November, they’ve been scrambling to catch up to the new reality. Going into the election, investors had been short certain sectors, like financials, in anticipation of a Clinton win. That trade, among others, was almost instantly reversed. The biggest surprise is how quickly they all adapted — though, that just shows you how resilient markets are. Investors have money on the line — and, when they believe in a set of policies because they’re optimistic about growth, markets move higher.
IP.com: Wall Street seemed really enthusiastic right after Election Day, but lately stories haven’t been as positive. Do you think investors expected too much too soon from a Republican majority in Congress and the White House?
Regan: The president has his work cut out for him getting his party on board. There are a lot of individual interests at play in the House and the Senate. However, the most frustrating aspect of all this for investors is that lawmakers were promising to repeal Obamacare for seven plus years, yet they never bothered to come up with a good enough plan that their entire party could support! While repealing Obamacare would help small business owners, and lead to better employment levels, the most important piece of legislation from a market perspective is tax reform. Specifically, corporate tax reform. That needs to get done.
IP.com: There has been a conflict between “soft” data and hard data lately, where consumers and businesses seem confident but the big-picture numbers don’t show a lot of pop yet for the actual economy. Again, is this a question of time and patience, or should folks be concerned?
Regan: I wouldn’t worry about that yet. Confidence is the pre-cursor to growth. We need investors, small business owners, big corporate CEOs, and American workers all, simultaneously, feeling better about the future. Their confidence will hopefully turn into meaningful growth. When people feel better about the future, consumer spend, small businesses hire, and corporations build — there’s a lag effect as all this kicks in but, sentiment is an enormous part of growth.
That said, I have my concerns; if Washington is not able to accomplish anything, we risk a pull-back in the markets and weaker sentiment. Wages are still weak and we’re confronting a structural economic shift. It’s going to take a lot of hard work to overcome this.
IP.com: With our access to data and information, it seems possible to formulate any kind of argument you like based on “evidence.” Again, do you think this trend is ultimately a good or a bad thing for investors?
Regan: It’s important not to be consumed by all the data because some data points that are more valuable than others. Meanwhile, there are a lot of fluctuations in the data points so it’s important to watch the overall trend. Wages, inflation, job growth and consumer confidence and sentiment are the biggies.
IP.com: Some people blame social media or even cable news for always focusing on knee-jerk reactions and hot takes. Do you think that’s a fair criticism in general, or is it just a convenient excuses for people who don’t want to bother digging deeper into the issues?
Regan: We live in an instantaneous environment. But, as an investor (and, in my case, as a journalist) you need to be able to think for yourself. If you believed the main stream media pundits on election night, and sold your portfolio because they were convinced the end of the world was coming, you would have lost a ton of money. You need to have your own compass, your own sense of where things are heading. There’s a pile-on effect in the media that will never serve investors well.
I learned early on to trust my gut. And so far, my gut feeling on markets, the economy, and Washington have proven right.
IP.com: You have three kids. What policy issues of the moment in 2017 do you think matter most to their future in 2027 or 2037?
Regan: Two things. The economic structural change our nation is experiencing and debt. $20 Trillion of it.
My husband, James, and I talk about this a lot actually. We both grew up in small towns that had strong economies. Rural and urban America is facing serious challenges and, unless we make some changes, it will be increasingly hard for young people to achieve prosperity. Regulations on small businesses are onerous, our tax policy is designed to penalize success instead of rewarding it, and rather than make tough choices, politicians are only incentivized to get reelected. We live in a tremendous country, and Americans have an incredible work ethic, but we need government to unleash our creativity – not hinder it.
As for our debt? It’s not sustainable. Read any history book and you’ll see that pretty quickly. We need to get serious about this because otherwise, we’re leaving our children nothing but a big hole they’ll struggle to climb out of.
IP.com: Some people may not know you are a classically trained opera singer. If you had to pick a song to describe the stock market in 2017 — either orchestral, pop, or whatever — what would it be?
Regan: I love this question! For sure, this year has been operatic. As in, dramatic Italian opera VERDI operatic. To characterize the stock market, I’d go with “Libiamo ne’ lieti calici” also known as the “Brindisi” song from La Traviata by Giuseppe Verdi. It’s a happy song with everyone toasting the future. It’s full of promise. And, that’s definitely the stock market this year.
That said, let’s all hope things don’t end like they did in Traviata.