Can Wall Street Save Trump? - TheStreet

In the midst of damaging headlines, reports of White House chaos and declining approval ratings, the president has found a measure of his success he likes: the stock market.

Trump has made a habit of touting the markets' rise as evidence of his administration's performance. When the Dow Jones Industrial Average hit 20,000 five days after his inauguration, he celebrated the milestone on Twitter, subsequently saying he hoped things would continue to go "up, up, up" later. He tweeted about the market rally again on Thursday morning and cited a "great level of confidence and optimism" among investors. And at his grievance-filled press conference later in the day, he highlighted Wall Street enthusiasm again.

"The stock market has hit record numbers, as you know," he said. "And there has been a tremendous surge of optimism in the business world, me means something much different than it used to. It used to mean, 'Oh, that's good.' Now it means, 'That's good for jobs.' Very different."

Populist nationalism and a promise to look out for "the forgotten man and woman" propelled Trump to the White House, but it is his pledge to reform taxes that has gotten Wall Street riled up.

A hazy remark last Thursday that his administration would be delivering something "phenomenal" in terms of tax in the next two to three weeks sent markets soaring. Benchmark indexes reached all-time records on Wednesday, marking Wall Street's longest record-making streak in a quarter century.

Even as Trump delivered a staggering 77-minute press conference on Thursday, tearing into the media, slamming leakers and making assertions of questionable veracity, investors remained relatively unfazed.

The S&P 500 and Dow ended the trading day down slightly, while the Nasdaq was up. (Volatility did jump.)

"[T]his press conference is insane but as long as [D]onald cuts my taxes [I'm] cool with it," quipped Fox Business' Charles Gasparino in a tweet, voicing an opinion many on Wall Street share.

While most agree tax reform is likely to come eventually, what exactly it will look like and when it will arrive are not yet clear.

Trump on the campaign trail put forth a Wall-Street-pleasing tax plan to reduce the corporate tax rate to 15% and enact a repatriation holiday for companies to bring foreign profits back, among other items. The "Better Way" platform pushed by House Republicans is slightly less generous to corporate America, though it will almost certainly be satisfied.

Republicans have said they'll tackle repealing and replacing the Affordable Care Act before taxes (though they could reverse gears). While Trump seemed to suggest a tax package was coming by March, House Speaker Paul Ryan has separately indicated he thinks a plan will come during the summer.

"With Trump, I view his more aspirational goals as opposed to policy directives," said Dean Zerbe, former counsel to the Senate Finance Committee and national managing director at Alliantgroup.

Details aside, Wall Street is already pricing in tax reform. And if and when a package goes through, corporate America will have a different role -- helping Trump sell it.

The plans put forth by both him and the House GOP primarily benefit corporations and the wealthy, not the middle-class Americans he says are his priority.

"What's in here for those people, those hard-working folks?" said Zerbe. "The person making $50,000, $60,000, obviously they're always going to appreciate having some more money in their pocket, but the real challenge is what can we do to encourage businesses to do more for those workers?"

He suggested pushing companies to expand employee ownership through measures like stock-bonus and profit-sharing programs as an avenue for Trump to sell his tax plan to the middle class. Hillary Clinton had such a proposal in her campaign platform.

"It really puts a lot of sizzle in the steak," Zerbe said.

Trump has a demonstrated willingness to muscle American companies where he deems necessary, and this could emerge as a new area where the president uses his bully pulpit to get corporations to comply.

It's not just Wall Street's performance Trump is looking to for success but also the advice of its personnel.

He has invited numerous former Goldman Sachs (GS) - Get Report executives to join his administration, including National Economic Council head Gary Cohn. He nominated billionaire investor Wilbur Ross as Secretary of Commerce and tapped activist Carl Icahn as an adviser on regulation. The president is reportedly considering bringing on hedge fund executive Stephen Feinberg to review American intelligence agencies.

Trump is looking to foes on Wall Street for support as well. Elliott Management head Paul Singer, who fiercely opposed Trump on the campaign trail, met with him at the White House on Thursday.

"He was a very strong opponent, and now he's a very strong ally," Trump said. "I appreciate that."