Trump calls on the SEC to abolish quarterly financial reports, Wall Street debates "transparency" and "flexibility"

For over half a century, US listed companies have been disclosing their performance on a quarterly basis; early Monday morning, this tradition was stirred up again by Trump's tweets - US President Donald Trump posted multiple tweets on social media, advocating for extending the performance reporting period from every three months to every six months, believing that this would "save money and allow managers to better run the company". This is not the first time Trump has spoken out on this issue, in 2018 he supported the semi-annual reporting system on Twitter, citing discussions with "several global top business leaders", emphasizing its ability to increase flexibility and reduce costs. TD Cowen analyst Jaret Seiberg personally believes that the likelihood of the Securities and Exchange Commission (SEC) implementing this plan is 60%, but Wall Street is skeptical, with some concerned that this could weaken corporate accountability and exacerbate market volatility. Looking back at history, the SEC mandated quarterly financial reports in 1970 as a response to decades of increasing transparency since the stock market crash of 1929. Current market opinions vary TD Cowen Managing Director Jaret Seiberg points out that for SEC Chairman Paul Atkins, this may be an "easy policy victory", consistent with his tone of relaxed regulation, but rule revisions require at least six months of preparation to pass judicial review. Irene Tunkel, Chief US Stock Strategist at BCA Research, analyzes from a strategic perspective, stating that quarterly reports have become a "tool to manipulate expectations" - nearly 80% of companies exceed expectations each quarter, reducing the credibility of performance guidance, distorting commercial decision-making with short-term targets, and escalating reporting costs exacerbate the "de-stocking" of the US market, reducing frequency or more favorable to companies. Evercore ISI Senior Managing Director Sarah Bianchi believes that while Atkins acknowledges the President's authority over the SEC, the real test is whether the SEC, after evaluation, believes that a change in direction is needed, whether the original agreement will be upheld. Jonathan Golub, Chief Stock Strategist at Seaport Research Partners, emphasizes that information transparency is the key to efficient capital markets, with the market rewarding more open and frequent reporting. Ed Mills, Washington policy analyst at Raymond James, points out that quarterly reporting is a clear requirement of the 1934 Securities Exchange Act, and the Sarbanes-Oxley Act has strengthened this standard. While the SEC has discretion in reporting frequencies, Congress is unlikely to abolish core requirements, with future discussions possibly providing greater flexibility for smaller companies. Opponents are concerned that extending reporting intervals will increase uncertainty, leading to heightened market volatility when companies disclose. Sameer Samana, Global Stocks and Physical Assets Manager at Charles Schwab Investment Research, believes that low-frequency information is detrimental to investments. Kim Forrest, Chief Investment Officer at Bokeh Capital Partners, points out that this will decrease the touchpoints for companies to disclose key facts, weakening investors' ability to understand the company's prospects through phone conferences. Michael Kantrowitz, Chief Investment Strategist at Piper Sandler & Co., although agrees with reducing short-term volatility, believes that volatility is beneficial for some traders and companies. Brian Nick, Director of Portfolio Strategies at Newedge Wealth, warns that this may lead to increased stock market uncertainty, decreased valuations, and heightened quarterly report fluctuations, the S&P 500 index may exhibit features similar to the Russell 2000 index, but this may benefit active management. Matt Maley, Chief Market Strategist at Miller Tabak + Co., points out that while lack of transparency makes it harder for investors, it allows management to focus on long-term business, disadvantaging options traders as they may make a lot of money when the company announces its performance, highlighting the importance of accurate analysis on Wall Street.