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Trump is the most pro-stock market president in history, Wharton’s Jeremy Siegel

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President-elect Trump is the most pro-stock market president in history: Wharton's Jeremy Siegel

The stock market could enjoy a bigger boost from President-elect Donald Trump than any previous administration thanks to his pro-business policies, according to Jeremy Siegel, finance professor at the Wharton School of the University of Pennsylvania.

“President-elect Trump is the most pro-stock market president we have had in our history,” Siegel said on CNBC’s “Squawk Box” Monday. “He measured his success in his first term by how well the stock market did. You know, it seems to me very unlikely he’s going to implement policies that are going to be bad for the stock market.”

The market already reached new heights in reaction to Trump’s election win as investors bet that his promises of tax cuts and deregulation will propel growth and benefit risk assets.

The S&P 500 soared 4.66% last week for its best week since November 2023, trading above 6,000 for the first time ever. The blue-chip Dow Jones Industrial Average also climbed above a new milestone of 44,000 post election.

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Investments seen as the biggest beneficiaries under a Trump presidency exploded during the week. 

Tesla, whose CEO Elon Musk is a prominent backer of Trump, saw shares skyrocket 29% to return to a $1 trillion market cap. Bank stocks such as JPMorgan Chase and Wells Fargo also had big rallies. Bitcoin continued to hit record highs as traders see looser regulations under Trump.

Siegel believes that Trump’s corporate tax cuts from his first term in 2017 are mostly likely to be extended.

“I think the extension of his 2017 tax cuts, looks pretty much like a slam dunk, but the expansion to all his other tax cuts is certainly going to be much more difficult,” Siegel said.

Still, the president-elect’s trade policy, including his vow to slap steep tariffs on trading partners, could hurt growth and inflame inflationary pressures at a time when the Federal Reserve has spent more than two years raising interest rates to bring down price increases.

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Finance

Gary Gensler reviews accomplishments, was ‘proud to serve’ as SEC chair

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U.S. Securities and Exchange Commission Chair Gary Gensler testifies before a House Financial Services Committee oversight hearing on Capitol Hill in Washington, D.C., on Sept. 27, 2023.

Jonathan Ernst | Reuters

Securities and Exchange Commission Chairman Gary Gensler spoke this morning at the Practising Law Institute’s 56th annual conference on securities regulation. 

It sounded awfully close to a farewell speech. 

“It’s a remarkable agency,” Gensler said of the SEC, which he has led since April, 2021.

“It’s been a great honor to serve with them, doing the people’s work, and ensuring that our capital markets remain the best in the world.” 

Gensler reviews accomplishments 

Gensle offered a review of what he has accomplished.  

Most notably, Gensler highlighted the many disclosure rules the SEC has enacted, including disclosure on data breaches, executive pay versus performance and additional disclosures on those seeking to control and buy more than a 5% stake in a company. 

Gensler made only passing reference to his most controversial disclosure rule, on climate change, which has been challenged in court. 

“Congress put in place important provisions about disclosure because information about securities creates a public good,” he said. 

On market structure, Gensler noted he had put in place new rules on central clearing of Treasuries and shortening of the settlement cycle for stocks from two days to one day, and had recently passed rules that allow stocks to be quoted in increments of less than a penny. 

Defense of crypto stance 

Gensler offered a full-throated defense of his approach to crypto. 

Gensler repeated his assertion that while he bitcoin is not a security, the SEC’s focus ” has been on some of the 10,000 or so other digital assets, many of which courts have ruled were offered or sold as securities” and are therefore subject to the SEC’s purview. 

He again asserted anyone offering to sell securities needs to register, and that intermediaries such as broker-dealers, exchanges and clearinghouses also need to be registered. 

He said that the failure to properly police the crypto industry had resulted in “significant investor harm” and that “the vast majority of crypto assets have yet to prove out sustainable use cases.” 

Proud to serve 

Gensler did not say he was resigning, but the tone was clear.

“I’ve been proud to serve with my colleagues at the SEC who, day in and day out, work to protect American families on the highways of finance,” he said at the end of his speech.

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VCs say tech investing is ‘tough’ amid IPO lull and ‘nuts’ AI hype

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Edith Yeung, general partner at Race Capital, and Larry Aschebrook, founder and managing partner of G Squared, speak during a CNBC-moderated panel at Web Summit 2024 in Lisbon, Portugal.

Rita Franca | Nurphoto | Getty Images

LISBON, Portugal — It’s a tough time for the venture capital industry right now as a dearth of blockbuster initial public offerings and M&A activity has sucked liquidity from the market, while buzzy artificial intelligence startups dominate attention.

At the Web Summit tech conference in Lisbon, two venture investors — whose portfolios include the likes of multibillion-dollar AI startups Databricks Anthropic and Groq — said things have become much more difficult as they’re unable to cash out of some of their long-term bets.

“In the U.S., when you talk about the presidential election, it’s the economy stupid. And in the VC world, it’s really all about liquidity stupid,” Edith Yeung, general partner at Race Capital, an early-stage VC firm based in Silicon Valley, said in a CNBC-moderated panel earlier this week.

Liquidity is the holy grail for VCs, startup founders and early employees as it gives them a chance to realize gains — or, if things turn south, losses — on their investments.

When a VC makes an equity investment and the value of their stake increases, it’s only a gain on paper. But when a startup IPOs or sells to another company, their equity stake gets converted into hard cash — enabling them to make new investments.

Yeung said the lack of IPOs over the last couple of years had created a “really tough” environment for venture capital.

At the same, however, there’s been a rush from investors to get into buzzy AI firms.

“What’s really crazy is in the last few years, OpenAI’s domination has really been determined by Big Techs, the Microsofts of the world,” said Yeung, referring to ChatGPT-creator OpenAI’s seismic $157 billion valuation. OpenAI is backed by Microsoft, which has made a multibillion-dollar investment in the firm.

‘The IPO market is not happening’

Larry Aschebrook, founder and managing partner at late-stage VC firm G Squared, agreed that the hunt for liquidity is getting harder — even though the likes of OpenAI are seeing blockbuster funding rounds, which he called “a bit nuts.”

“You have funds and founders and employees searching for liquidity because the IPO market is not happening. And then you have funding rounds taking place of generational types of businesses,” Aschebrook said on the panel.

As important as these deals are, Aschebrook suggested they aren’t helping investors because even more money is getting tied up in illiquid, privately owned shares. G Squared itself an early backer of Anthropic, a foundational AI model startup competing with Microsoft-backed OpenAI.

Using a cooking analogy, Aschebrook suggested that venture capitalists are being starved of lucrative share sales which would lead to them realizing returns. “If you want to cook some dinner, you better sell some stock, ” he added.

Looking for opportunities beyond OpenAI

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