Wall Street wasn’t initially sold on a President Trump — typically markets hate uncertainty and he seems to bring it by the metric ton. But, it’s been a solid first-quarter performance for the market since Trump was elected, with all three major indexes — the Dow, S&P 500 and Nasdaq — hitting new highs in recent weeks as traders cheered Trump’s pro-business agenda.
“I’ve made a million dollars since the election,” a managing director at a bulge-bracket firm said. “Our stock is up every day.”
And, when traders are making money … they’re also spending it. There’s a direct correlation between finance professionals’ day-to-day business and their discretionary spending. Luxury or high-end items, such as automobiles and entertainment usually get a boost when Wall Street is feeling good.
Back in October I polled about a hundred bankers, traders, analysts and portfolio managers about spending for a little something I call the “escort indicator” — a gauge of discretionary spending on everything from fancy cars to escorts. A whopping 80 percent said they preferred saving in the current environment amid all the uncertainty surrounding the presidential race. So, I reached back out to them to see if, now that Donald Trump is president and embarking on a pro-business agenda, their opinion has changed. And 30 percent said they’ve increased their spending.
We’ve yet to see a big pickup in spending on pricey toys like expensive cars and boats, but several industry guys said they’re in the market for classic Ford Broncos for the summer. The most expensive car mentioned that was recently purchased was a 2016 Aston Martin DB11 for over $200,000.
“I’ve made a million dollars since the election. Our stock is up every day.”
I spoke with six real estate agents out in the Hamptons who haven’t seen a pickup compared to this time last year in the real estate market, but they all said it’s still a little too early to tell. All of them are optimistic and expecting a big year. And basically all of the industry professionals who summered out there this past summer said they plan to do it again for 2017. And many of the people polled said they are more open to buying luxury accessories like watches and jewelry. Twenty percent of those polled said they were planning or have planned a vacation similar or better than the previous year.
“To do it right it’ll cost around twenty-five grand,” a partner at an expert network said about his family trip. “After the airfare and a beachfront house for a week I’m already at ten grand.” He’s planning a trip in Tulum, Mexico.
Of course, this is Wall Street, so there’s also some discretionary spending that requires a little extra, ahem, discretion.
“Chelsea” a high-end escort in Manhattan who charges $1,000 an hour, said she’s been very busy the last few months.
“Most of my regulars work on Wall Street,” she said. “And they’ve been calling a lot. And over the last year we’ve been doing more private parties.”
It’s a trend she says has been developing recently. I spoke with Chelsea’s friend and business partner, “Sierra,” who said, “Once a month we’re invited to a private party—it’s usually about ten guys in the basement of a restaurant. Twenty of us girls come in so it’s a 2 to 1 ratio. We can make two to three grand on those nights.”
Chelsea and Sierra said there’s been a steady uptick in business since the fall and it continues to rise.
Trips to the massage parlor, strip club field trips and drug use have all increased since October. Only about 20 percent of the men I spoke to copped to any of this kind of behavior, but the ones who did said it’s happening more frequently than just a few months ago.
In the years following the financial crisis, Wall Streeters had to keep a low profile on spending and indulgence, lest they be chased by an angry mob. But, that’s starting to change.
“Guys are starting to cut loose a little more than in years past,” a hedge-fund trader said. “It’s not like the insanity of the late 90’s and early 2000’s. We’ll probably never see it like that again.”
Although, you know what they say: Never say “never.”