Economist sees industry winners, losers as result of Trump presidency

Several industries will either benefit or be negatively impacted as a result of Donald Trump becoming president, an economist said.

Jim Huntzinger, chief investment officer for BOK Financial, the publicly-traded parent company of Bank of Arkansas, with Bentonville and Fayetteville branches, said the following industries will be benefactors in a Trump administration:

• banks

• biotech

• pharmaceuticals

• traditional energy

Huntzinger expects finance to benefit as a result of the Dodd-Frank Act being curtailed and regulations reduced.

However, new energy will be negatively impacted as financial support for the turbine industry “will be harder to come by,” he said.

The biggest risk factor from Trump’s campaign regarded trade and whether his changes will include tariffs.

“[Trump] says he wants trade, but he just wants it to be fair,” Huntzinger said. However, the market could be at risk if he’s too bold in isolating the United States from trade partners.

To help push Trump’s agenda, a Republican-controlled Congress will look to approve tax reform, repatriation of foreign profits into the United States and infrastructure spending.

“I fully expect to see tax reform,” said Huntzinger, adding the repatriation of foreign profits would be “very positive for the economy.”

A Trump presidency also will impact the Federal Reserve. During the campaign, Trump was “extremely critical” of Fed chair Janet Yellen, Huntzinger said. Her term ends in February 2018 and she likely won’t remain in the position after it ends.

And in December, the Fed looks to raise rates. “I think they are going to do it,” he said.

He expects to see short-term rates increase by 25 basis points. How many and how quickly future rate hikes will come will depend on the strength of economy.

Meanwhile, the reaction in the bond market is an increase in longer term interest rates, he said. A 10-year note jumped to 1.9%, from 1.7%.

“That’s a very big move,” Huntzinger said. “The bond market is anticipating more growth and higher inflation.”