On a day filled with significant updates for businesses and investors, President Donald Trump reignited a longstanding proposal regarding corporate earnings reporting. In a social media post, he suggested that public companies should shift from a quarterly earnings report system to one that requires disclosures every six months. Trump argued that this change would not only reduce costs but also allow company managers to concentrate on managing their businesses effectively.
While this proposal is not entirely new—many European and UK companies follow a semi-annual reporting schedule—it does come on the heels of broader efforts by Trump to reshape the American economic landscape, often casting doubt on data that could potentially tarnish his legacy.
This idea is not without its supporters among business leaders and academics, who argue that the current practice of quarterly reporting pressures companies to prioritize short-term gains over long-term growth. Trump had previously raised this idea in 2018, advocating for the Securities and Exchange Commission (SEC) to consider such a significant shift. However, it remains unclear if any concrete actions were taken at that time.
Critics of the quarterly capitalism model include public figures across the political spectrum, such as Hillary Clinton, who proposed solutions encouraging long-term investment over fleeting profits during her presidential campaign. Prominent financiers like Jamie Dimon and Warren Buffett have also weighed in, suggesting that while earnings forecasts may be problematic, they don’t believe in abandoning the quarterly and annual reporting structure essential for market integrity.
Proponents of the existing quarterly reporting system argue that regular financial disclosures foster market transparency and fairness. This sentiment holds that shareholders, regardless of how many shares they own, deserve timely insights into company performance. Opponents of Trump’s proposal, such as George Pearkes, a global macro strategist, have articulated concerns that reducing reporting frequency would increase risks associated with the U.S. equity market when compared to international peers.
Any changes to the earnings reporting schedule would require approval from the SEC, which is led by Trump-appointed chair Paul Atkins. The SEC has stated that it is currently focusing on this proposal at Trump’s request, aiming to alleviate regulatory burdens on companies.
The broader implications of Trump’s push for less corporate transparency are significant. He has consistently displayed unease regarding unfavorable data and has made efforts to minimize accountability for negative figures that could reflect poorly on his administration. Recent actions include firing officials responsible for data that conflicted with his narrative and downplaying adverse economic indicators.
This tendency to prioritize optics rather than transparency adds context to his latest earnings reporting suggestion. Despite fluctuating economic conditions, corporate earnings have presently managed to withstand the impacts of the ongoing trade war, supporting a resilient stock market. However, sustained tariffs may impose increasing pressure on corporate profitability, raising questions about long-term economic stability.
