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Will the market get Trump'd?

Trying to predict who will be the next president is a sport on Wall Street. Hedge funds and banks spend enormous amounts of money, time and resources on trying to get an edge on who will win. The 2016 president election will dramatically change the asset allocation and exposure of everyone's portfolio.

Donald Trump
Aaron P. Bernstein | Reuters
Donald Trump

A few elections ago, when I was working on Galleon Group's trading desk, we spent all summer devising a game plan for each of the candidates: George W. Bush and Al Gore. We thought Bush would be great for health-care and defense stocks but Gore would be better for all other sectors. So we planned accordingly, even up to the recount in Florida.

In normal election years, it's much easier to quantify which candidates will be good for the market versus the ones that will weigh heavily on it. Typically it's like predicting the outcome of a bowling ball and a feather put on both sides of the scale — one will go up and the other down. But this is anything but a typical election year. There is … the Trump factor.



So, kiss your wife and then buckle up. 2016 is going to be one heck of a wild ride — like a pack of drunken Palins at a snowmobile party.

Would a President Trump be good for the stock market – and your portfolio? Let's break it down.



TRUMP SCORECARD: Bulls vs. Bears

Giving America the business
Donald Trump is a businessman who knows how to invest and grow companies — if he can turn those skills on the economy, it could help juice the recovery. This one goes to the … BULLS.

Made in the U-S-A
Trump wants to be the "jobs president," bringing more jobs back to the U.S. However, if his tough talk on Apple is any indication — he said he would force them to make all their products in the U.S., not China — that probably wouldn't go over well with investors, unless he starts talking about what incentives he would offer companies to do this. Right now, based on math, I have to give this one to the … BEARS.

Taxes
Trump wants to cut taxes for most Americans, which he says will be offset by reducing or eliminating most deductions and loopholes for the wealthy and bringing back corporate cash held overseas (offering a one–time tax rate on that of 10 percent). This one is … A DRAW.

De-fense
Trump plans on ramping up defense spending to combat ISIS. Beefing up defense has historically been good for the market. Good for the … BULLS.

China and Mexico
Trump has said that he will impose big tariffs on products coming in from China and Mexico, which could potentially help national pride. But ultimately, it would probably trigger a trade war. This one goes to the … BEARS.

The Palin factor
The stock market doesn't reward uncertainty. And, while being endorsed by Sarah Palin doesn't necessarily create uncertainty, having her on his ticket – or in his cabinet does. Palin has said she would like to serve as Trump's energy secretary – in order to do away with the department and give more control to states on energy policy. That is a lot of uncertainty. This one goes to the… BEARS.


Former Alaska Gov. Sarah Palin speaks as she endorses Republican presidential candidate Donald Trump at a campaign stop, Tuesday, Jan. 19, 2016, in Ames, Iowa.
Al Drago | CQ Roll Call | Getty Images
Former Alaska Gov. Sarah Palin speaks as she endorses Republican presidential candidate Donald Trump at a campaign stop, Tuesday, Jan. 19, 2016, in Ames, Iowa.

You're f--
The Donald won't be able to use his tag line on Congress… "You're fired!" when things don't go his way. And even if Congress remains under the control of the Republican Party, he'll have a difficult time getting things done. This one goes to the … BEARS.


FINAL SCORE: Bears 4, Bulls 2

Trump is a businessman, which is encouraging for the market. But the only way for him to convince the market he's good for the economy – and America — is to provide more tangible numbers to his economic plans – not just sound bites.

Currently his campaign promises sound more like a drunk college senior at the bar discussing the future. It's grand, ambitious and there's something a tad bit endearing about it. But is it realistic?


Commentary by Turney Duff, a former trader at the hedge fund Galleon Group. Duff chronicled the spectacular rise and fall of his career on Wall Street in the book, "The Buy Side." He's also a featured on CNBC's "Filthy Rich Guide" and a consultant on Showtime's "Billions," starring Damian Lewis and Paul Giamatti. Follow him on Twitter @turneyduff.

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