How Wall Street Is Preparing For "President Trump"

While the market has had its share of bogeymen to worry about so far in 2016, mostly along the lines of the "Four Cs", namely China, Crude, Credit and Currencies, it has so far largely ignored one letter: the Big D, for Donald, as in how would a Trump presidency affect the market. And, as Reuters writes, it is time for Wall Street to add "the juggernaut that is Donald J. Trump to the list of what-ifs that is worrying Wall Street."

The kneejerk, conventional wisdom reaction is that the non-establishment outsider would be a big risk for stocks: "a growing realization that the unpredictable New York real estate developer is in a position to win the Republican nomination and then battle Hillary Clinton for the White House in November's election has caused some investors to sell U.S. stocks. They fear having such a wild-card president could trigger trade wars, hurt the economy and add a lot of market volatility."

AS Doug Kass notes, "as the market rarely feasts on lack of predictability - Trump represents a nightmare for investors this year." Kass said last week that he was adding to his existing short bet on the U.S. stock market in part because of Trump's increasingly strong position in the race.

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