It is not clear if Donald Trump or Kamala Harris will be in the White House in January. There is more and more evidence that the election could lead to a rush of deals, no matter what the result is. The big banks, like Citigroup C 2.57%, Goldman Sachs GS 1.43%, and JPMorgan Chase JPM 0.56%, would be happy about that.
An example from the past is one reason. Deals to join and buy other businesses have tended to slow down in the third quarter, right before an election, and pick up in the fourth. Mergermarket says that in three of the last four election cycles, fewer deals were made in the third quarter. In the other three, more deals were made in the fourth quarter. The financial collapse of 2008 and the COVID pandemic of 2020 were the only exceptions.
But Mergermarket says that total merger and acquisition activity was a little lower than it was in the same quarter last year. However, big banks say that their investment banking business is doing very well. This week, Citigroup and Goldman Sachs both said that fees from their investment banking businesses were 44% and 20% higher than the same time last year. The move came after JPMorgan and Wells Fargo WFC 1.36% reported 30% and 37% raises last week.
There are a lot of experts who think that big deals will be easier to make whether Harris or Trump wins. President Joe Biden made tough antitrust enforcement a signature of his administration. He put two tough enforcers in charge of the Federal Trade Commission and the Justice Department’s antitrust office, respectively.
Now, some business leaders think Harris will stop being so strict with regulation and might even take Khan’s place. A lot of big Democratic donors, like Reid Hoffman, co-founder of LinkedIn, have said that Harris should do that. However, Hoffman later said that he had never talked to Harris directly about the problem.
Harris hasn’t said if she will take over for Khan, whose time ended last month.
Analysts at Signum Global Advisors wrote in a note on Wednesday, “A new president keeping on a chair…whose term has expired has never been done.” They also said they thought Harris would choose one of the other Democratic commissioners to be chair instead.
Some Big Tech companies and other big businesses would like things to change. As FTC chair, Khan fought some deals that other chairs might have let go through. She has sued or looked into tech companies like Amazon AMZN -0.43% and Meta Platforms META-1.62%. She also sued to stop Kroger KR0.91% and Albertsons ACI -0.76% from merging.
For some conservatives who are also against Big Tech companies, the attention has been good. But if Trump wins, she and Kanter are likely to be removed. Being chair of the FTC gives Khan power over other parts of its regulatory agenda, which would be too much for Trump, according to a study note from Beacon Policy Advisors. Khan agrees with some Republicans on antitrust issues.
Early this month, Beacon wrote, “It is almost certain that neither she nor Kanter will stay in office if Harris doesn’t win.”
Trump hasn’t been very clear about his plans to fight competition either. This week, Trump didn’t directly answer questions about whether he agreed with the Justice Department’s suggestion that the court could break up Alphabet GOOGL -0.18%’s Google. Instead, he said he would “do something” about the company and that it could be made “more fair” without being broken up.
According to Beacon, whoever takes over for Khan in a Trump administration might not be “as lax as a traditional GOP candidate may choose.” But for Wall Street dealmakers, the unknown probably looks better than the way things are now.
