Macro Commentary
President-elect Trump remains central in decision for businesses and investors alike. This week he held his first press conference after the election during which, among various topics, he commented on the pharmaceutical industry saying they are “getting away with murder.” Singled out for the tax inversions popular in the industry in prior years, pharma stocks ranging from mega-caps to biotechs fell swiftly in the market during the minutes after the comment though stabilized in the days after. Whether it be fundamental investors looking to get out of the way of a potentially erratic policy decision or computerized algorithims simply trading markets based on key terms, the incoming President’s words hold sway over today’s financial markets which creates risk and opportunity.
In addition, the PEOTUS (President Elect of the United States) continues to influence business decisions. Also this week, a press release from e-commerce behemoth Amazon announced that they would be hiring 100,000 new people over the next year and a half. This is an increase of 50% of their global workforce. Trump has criticized Amazon CEO Jeff Bezos in the past saying the company has “antitrust issues” and suggesting that the company has avoided media backlash due to his stake in The Washington Post. Trump took a small victory lap in the announcement saying that he was pleased to have influenced the decision. A New York Times article covering the event made the salient point that the increase in workers does not offset the loss in traditional retail jobs triggered by the broadening acceptance of online shopping. This is a natural part of economic development (Schumpter’s concept of “creative destruction”) but again demonstrates that change in support of long-term growth creates displacement in the short-term. Looking back at history, modern man would not suggest protecting the buggy whip industry from the onslaught of automobiles though in considering today’s challenges, and in an age of populism, the topic (under a different name) might come up now and again.