Fisher Investments Reviews How Presidential Executive Orders Impact Stocks

Transcript

I'm asked a lot with President Trump about whether executive orders can be things that will be good or bad for stocks. Let me just say that executive orders have limited powers and they're only temporary.

There's things presidents can do freely. By executive order, he can and probably will, reverse almost every executive order that President Biden imposed during his four years. If President Biden could do it as an executive order, so can President Trump—reversing it? Secondarily, most of those executive orders that Joe Biden did, you can't begin to actually enumerate at this moment in time. Name five for me? Real fast here. One. Two. Three. Four. Five. You can't do it.

Why? Because mostly it's a bunch—a bunch of minutiae. Are there some bigger ones? Yeah. Are they market movers? Mostly no. So, the elimination of them aren't market movers? Mostly, yes. You follow that?

Now, Donald Trump has his ideas about things. And again, I'm not his friend or foe on this. But the reality is executive orders have guardrails around them in terms of the boundaries in which a president can impose them. And he will get sued by people that don't like what he wants to do. Every time that he imposes an executive order— A. that's even close to the guardrails, or B. mostly that they just don't like—trying to slow it down, trying to stop it.

And so this goes back to a tenant, and I've said this many times before. I've said it this month. I'll say it next month. I've said it years ago. I said it about President Biden, President Obama, President Trump from before—his first term. Presidents don't have as much power to impact markets, or even economies, as people think they do. That some people hope for, and other people fear. The fact of the matter is, the president has limited powers in our constitutional system. He's got some things he can do, but they're more limited by executive order than you commonly think they are, because we set the system up to be that way.

To get big stuff done, he really does have to do one of two things. Get legislation, which is very tough to do in the environment where congressional margins are so thin, and put in appointees who operate in ways that he wants them to differently, in all of the agencies, then appointees did before. But executive orders themselves are, in terms of impacting markets, pretty much on the margin of things, and don't worry about that too much.

The president is not a king. He's reigned in by constitutional authority. And that will be true no matter who is president. And that will be true for the president after President Trump and the president after that, and the president after that. Thank you very much for listening.

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