Donald Trump has said a lot of things that, were he a sitting U.S. president instead of a candidate for the job, could be expected to roil financial markets.
If investors were taking the Republican presidential nominee at his word, they would be selling shares of Apple Inc, Mondelez International Inc and Ford Motor Co, and cashing out of Mexican equities - all targets of Trump threats of boycotts, barrier walls or import taxes. Investors betting on a Trump presidency would be buying shares of U.S. companies that dealt exclusively with domestic customers and suppliers.
Yet the Trump trade is not much in evidence on Wall Street, where some market strategists and investors told Reuters they find it difficult to position their portfolios for his possible presidency, in part because many of his proposals are contradictory or lack specific implementation details.
Should Trump win the Nov. 8 election, some investors said, it is not clear how the New York businessman could push through policies that clash with mainstream Republican party views on free trade and low taxes.
"The investment community in particular is having trouble figuring out what (Trump) is about," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
"They are not taking individual items as seriously as they would with other candidates," he said.
Traders said they will be watching Trump's speech at the Republican convention on Thursday night for signs of how he would address business and tax issues, though they expect scant detail.
The Trump campaign did not respond to calls and emails requesting comment on how investment strategists viewed his policies.
Breaking up banks
U.S. stock indexes have rallied to new highs as Trump received the nomination of his party on a platform that includes a proposal to reinstate the 1933 Glass-Steagall law that would require a breakup of the largest U.S. banks.
A Trump presidency "would not be good for markets at all," because of the uncertainty among investors about his true priorities, said Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management in New York.
Zemsky, however, said he has not so far been selling securities because of Trump. "It's hard to react to things that are said because of the lack of specificity, and the probability of him being elected is still low so changing your portfolio because of him is not likely to be profitable," he said.
To be sure, Trump has supporters on Wall Street. Anthony Scaramucci, founder of SkyBridge Capital, has backed Trump and said he would be good for the economy because he would cut back on business-limiting regulations, such as those governing bank investments and labor policies. He also thinks Trump would bring in tax reform.
Although never elected to public office, Trump defeated 16 Republican rivals to win the nomination. He trails Democratic rival Hillary Clinton by 7 percentage points, narrowing the gap from 15 points late last week, according to a Reuters/Ipsos poll released on Tuesday.
If Trump's stated proposals were carried out, that could leave the economy significantly weaker because they would result in large federal budget deficits and an anti-global stance that could hurt trade, according to a June analysis by Moody's Analytics chief economist Mark Zandi.
Zandi forecast the loss of 3.5 million jobs during a Trump administration alongside a drop in stock prices and real estate value.
Trump has said he would renegotiate the North American Free Trade Agreement with Mexico and Canada, build a wall between the United States and Mexico to stop illegal immigrants, and raise a 35 percent tariff on products made in Mexico by Ford and United Technologies Corp's (UTX.N) Carrier Corp.
Yet there has been no selloff of Mexican stocks, which are up 10 percent so far in 2016. That is the best gauge of investment reaction to Trump, said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
"For the most part," Ablin said, "that suggests to me the investment community has not considered a Trump presidency a probable scenario at this point."