A consensus emerges in Davos: Trump will win re-election

The Davos consensus on the presidential elections

Publicly, global business leaders gathered at the World Economic Forum in Davos, Switzerland, have declined to predict the winner of the upcoming U.S. presidential election. The closest they've come? I call it a 'geopolitical risk'.

But when you talk to executives privately, they are more explicit: They expect Donald Trump to win, and while many are concerned about that, they are also resigned to it.

The predictions of a Trump victory came in different forms. Many pointed to the headlines and the mood in the US. A senior banker told DealBook that all you had to do was do that look at the polls only to find out that Trump was on his way to winning.

JPMorgan Chase's Jamie Dimon also received widespread attention for his comments. In a interview with Andrew on CNBC, he did not predict that Trump would win, but suggested that firing the former president and his supporters would be a mistake.

“Just take a step back and be honest,” Dimon said, listing the things he thought Trump got at least partially right: NATO, immigration, the economy, China and more. “He wasn't wrong on some of these critical issues, and that's why they voted for him,” he said.

“I think this negative talk about MAGA is going to hurt [President] Biden’s campaign,” he added.

That said, things often go wrong in Davos. A common criticism of those attending the forum is that they are a counter-indicator of what is to come, so their expectations could bode well for Biden or for Trump's Republican rivals. “Trump is already the president of Davos – which is a good thing, because the Davos consensus is usually wrong,” Alex Soros, George Soros' son, said on a panel.

A bit of history: the consensus at Davos was that Hillary Clinton would beat Trump in 2016. And in 2020, the prevailing view was that there were few risks to the economy… when the pandemic started to explode.

Seen and heard:

Perhaps the biggest complaint among attendees was about the long lines everywhere, especially at Grandhotel Belvédère. Many complained that the process of getting into the building – with wait times that could reach up to an hour – was worse than ever and that it didn't matter whether you were a business traveler or a lesser-known guest. One executive complained to DealBook that security was tighter than at US airports because he had to take off his Apple Watch every time. At previous meetings, executives wanted a room at the Belvédère because the hotel was considered the best in town and closest to the main location – but many told DealBook they no longer do that.

Despite the rigid class system – people are assigned different colored badges that grant different levels of access – the event has strange ways of leveling the playing field, at least a little. At last night's Salesforce party, the hottest ticket of the week, even billionaires had to wait outside with everyone else to get in to see Sting perform.

HERE'S WHAT'S HAPPENING

Congress passed an emergency bill to prevent a government shutdown. President Biden is expected to sign the bill into law on Friday to keep the federal government operational until early March. It is the third emergency law since October.

Jamie Dimon gets a big pay increase. The board of JPMorgan Chase promised the CEO received $36 million in compensation for 2023, a year in which the bank weathered a banking crisis and rising interest rates and generated record profits. The 67-year-old, the longest-serving chief of a major US bank, has not yet given any indication of when he might retire.

Reddit is reportedly considering a public listing in March. The social media platform is said to be moving forward with a long-held plan apply for an IPO in the first quarter, according to Reuters. The market for new listings has been bumpy and the outlook appears to have improved little this year.

Macy's will cut thousands of jobs. The country's largest department store operator will lay off 2,350 employees, about 3.5 percent of its workforce. The cuts come as Tony Spring, a veteran retail executive, prepares to take over as CEO next month. Macy's has been struggling with declining sales since the pandemic-inspired shop-from-home boom shook the retail sector.

BYD doubles down on overseas expansion. The Warren Buffett-backed Chinese electric vehicle manufacturer plans to invest $1.3 billion in a new Indonesian factory as it continues its aggressive push beyond its home market. Indonesia is home to the world's largest reserves of nickel, a crucial mineral in electric car production

The ESG exodus is increasing

The money flowing from ESG funds has gone from a trickle to a flood, as investors fret over a sector hit by concerns about greenwashing, red-state boycotts and boardroom debates.

The investment strategy has become increasingly politicized after being used by companies to address environmental, social and governance issues among their employees, customers and other stakeholders. In a sign of the times, the sentence has been scrubbed from the official program of the World Economic Forum in Davos, after having been on the agenda in previous years.

Investors took out $5 billion of ESG-focused 'sustainable' investment funds last quarter, according to a new report from Morningstar. The pullbacks occurred despite a broader market rally in late 2023.