Bloomberg by Felice Maranz (November 09, 2016)

Banks, financial cos. outperform as Donald Trump win may mean lighter regulation, more spending and growth, triggering higher interest rates, and more favorable view on deals, analysts say.

  • Trump may also help student lenders, with NAVI up as much as
    15%; FNMA up as much as 16% amid better odds of GSE capital
    retention
  • KBW banks (BKX) up as much as 3.8% to highest intraday since
    Aug. 2015; all members rise
  • Led by NYCB, ZION, FITB, RF, WFC, JPM, SIVB, CFG, HBAN,
    BAC
  • KBW regional banks (KRX) up as much as 3.5% to highest since
    Sept. 2008
  • Led by TCBI, FHN, PACW, PB, WBS
  • S&P 500 financials (S5FINL) up as much as 2.8% to highest
    since Aug. 2015
  • Led by NAVI, BEN, AMP, UNUM, LNC

KBW (Brian Gardner)

  • Election positive for private student lenders, student loan
    servicers, private mortgage insurers
  • New education scty, CFPB director likely lift some
    regulatory pressure
  • FNMA, FMCC future wasn’t campaign issue, so no firm
    conclusions
  • NOTE: Earlier, KBW wrote may be “positive snapback” once
    investors digest election results, factor in more favorable
    regulatory environment for financial sector
  • Insurers, brokers, asset managers may be ‘‘big winners’’
    on higher likelihood Dept. of Labor (DOL) fiduciary rule
    is delayed, rewritten or scrapped; sees smaller banks
    faring better in Washington than big banks

COWEN (Jaret Seiberg)

  • GOP sweep should broadly benefit payments space
  • Means less risk for V, MA, DFS, AXP, card issuing banks, new payment tech, others

FBR (Edward Mills)

  • ‘‘Everything is in play’’ for financials
  • Near-term, the future of Janet Yellen’s chairmanship, Fed’s ‘‘accommodative nature” are in doubt, while medium-to-long term focus is on regulatory change
  • Full story

COMPASS POINT (Isaac Boltansky)

  • Trump victory puts Dept. of Labor (DOL) fiduciary rule in
    jeopardy
  • CFPB will likely have less influence, new director
  • May embrace FNMA, FMCC recap, release calls
  • Full story

EVERCORE ISI (Glenn Schorr)

  • “Friendly pace” of regulation under Trump would be positive for banks, GDP growth, though it may be “wishful thinking” that Dodd-Frank will be revised, Fed’s Daniel Tarullo will be out, CFPB will be neutered, DOL would say “just kidding” on fiduciary rule
  • Pro-growth, lower taxes, fiscal stimulus/infrastructure agenda good for lenders
  • Rate hikes still in play, especially with stimulus
  • Full story

JEFFERIES (Ken Usdin)

  • Republican president, control of Congress may be positive
    for banks, though Trump’s lack of governing experience,
    policy wildcards create “clouds of uncertainty”
  • Market volatility may help trading rev.; uncertainty about
    various policies may hamper underwriting/M&A globally,
    hurting bank fees
  • Global trade impacts may hurt Citi more than peers
  • Full story

CAPITAL ALPHA (Ian Katz)

  • Trump win turns focus to financial deregulation, CFPB, SEC, Fed, Treasury, with key question of “how far” Republicans will go to “gut” Dodd-Frank
  • Full story
  • Separately, writes Trump may drop too-big-to-fail tag for AIG, PRU

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To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net
To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Sylvia Wier