Anthony Scaramucci is back at SkyBridge Capital, the hedge-fund firm he founded in 2005 (and attempted, controversially and unsuccessfully, to sell to a Chinese conglomerate in 2017), but that hasn’t stopped the Trump ally and former White House staffer from offering advice to his former boss.
During a phone interview with MarketWatch, Scaramucci, who spent a fleeting stretch as President Donald Trump’s communications director, said he’s optimistic about the outlook for the stock market in 2019 but thinks there are at least three things the 45th president can do to stabilize markets after a rout that saw the Dow Jones Industrial Average
and the S&P 500 index
book their worst December declines since the Great Depression and all three main equity indexes, including the Nasdaq Composite Index
, log their steepest annual drops in a decade:
- Resolve the trade dispute with China and Europe.
- Continue to deregulate markets.
- Better control the media message.
The hedge-fund manager, who looks after some $9.6 billion at SkyBridge’s fund of funds, said a resolution of the tariff clashes between Trump and Chinese President Xi Jinping is paramount in easing investor anxieties. “The overhang and the bellicosity of the rhetoric has jarred people and has altered market psychology,” in Scaramucci’s view.
From the MarketWatch archives (April 30, 2018): China conglomerate ends bid to acquire Scaramucci’s SkyBridge
Separately, the SkyBridge founder said Trump retains significant leverage in Washington despite a midterm election that saw Republicans lose their majority in the House. Trump’s sway over the makeup of the judicial branch can still have the effect of fostering free-market and business-friendly conditions, Scaramucci said. “Trump’s greatest strength is the execution on the judicial side. He can de-layer the economy regulatorily.”
One key message Scaramucci has for Trump, whose prolific tweets have become a key feature of his presidency, is to adopt a tone of “more optimism and less anxiety” on social media.
As for Trump’s frayed relations with the traditional media, said Scaramucci: “His war with the media is absolutely asinine.”
The hedge-fund investor known, generally with affection, as “The Mooch” cited former President Ronald Reagan and his Reagan chief of staff Michael Deaver as White House players with a more demonstrable knack for managing the media.
Even without such issues having being resolved, Scaramucci remains sanguine about the outlook for 2019, where, he said, he believes high-single-digit returns can be achieved, despite a resurgence of volatility marked by gut-wrenching intraday moves that have whipsawed investors.
“I don’t see the recession happening,” he said, and with markets undervalued after the multimonth downturn, “it augurs for an OK environment for 2019.”
An election-year cycle usually brings with it increased government spending, he said, another potentially bullish factor for the market.
As for Scaramucci’s brief but dramatic stint as White House communications director, which ended abruptly in late July of 2017, he had this to say: “I probably shouldn’t have started my first day on the job with a hockey mask and chain saw,” a not-so-oblique reference to his unfettered attacks on several Trump officials that culminated in a profanity-tinged interview and his eventual firing.
“It was an odyssey,” he said. “I’m not a baby or a whiner. I made a mistake.”
Key Words (July 27, 2017): Scaramucci on Washington back stabbers: ‘I’m more of a front-stabbing person’
It’s worth noting that Scarmucci told MarketWatch he’s not the hedge-fund investor that CNBC’s Scott Wapner reported had recently been enlisted by the Trump administration for advice on soothing the bruised stock market.
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