Goldman Is Back on Top in the Trump Administration - Positive for the company stock price

For starters, shares of Goldman Sachs were on a tear, having rallied about 30 percent in the month since Donald Trump was elected president. Trump had also restarted an age-old tradition of presidents naming Goldmanites to top spots in their administration.

Former Goldman Sachs partner Steven Mnuchin served as Trump’s national finance chairman and is now Trump’s nominee for U.S. Treasury secretary. Trump has also tapped Goldman Sachs President (and the bank’s de facto No. 2) Gary Cohn to be his top economic adviser in the White House. Other Goldman alums in Trump’s inner circle include Anthony Scaramucci, a former Goldman banker and a member of the Trump transition team’s executive committee, as well as Steve Bannon, Trump’s campaign manager.

Not only has Trump’s election stoked hopes for looser regulatory policies that will make it easier for banks to take bigger risks and book fatter profits, but Goldman also appears to have regained its place at the nexus between Wall Street and Washington. After being largely cut out of the federal government during the Obama years, with few of its alums tapped for big jobs, Goldman is starting to live up to its former nickname, Government Sachs.

Despite painting Goldman as a symbol of a corrupt system during the campaign, he is leaning heavily on the firm’s people.

Cohn and Mnuchin are poised to preside over a rollback of financial regulations that arguably threatened Goldman more than any other top bank in the years following the financial crisis. Most notably, Trump has said he’s considering a repeal of the 2010 Dodd-Frank Act that Congress passed to protect consumers and prevent a repeat of the financial crisis. Regulators appointed by Trump could also choose to give banks more leeway with certain rules, even if they remain in place.

A key part of Dodd-Frank is the Volcker Rule, a law named for former Federal Reserve Chairman Paul Volcker that was intended to cut Wall Street risk-taking by banning firms from making bets with their own money and limiting investments in hedge and private equity funds. The rule was particularly tricky for Goldman, which gets about half its revenue from trading and held billions of dollars in such funds.

Expectations for Goldman’s 2017 profit have soared since Trump’s win, rising by $543 million over the past month to $7.67 billion, according to the average estimate of nine analysts surveyed by Bloomberg. The firm’s surging stock price has been the largest driver behind the Dow Jones Industrial Average’s climb toward 20,000.

Overall this is a positive for the stock price of the company.

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