These stocks could benefit from a Trump win
Donald Trump has good chances of returning to the White House. If he actually becomes the US President again, it could impact the stock market.
It is still completely unclear who will decide the US Presidential elections after Joe Biden's withdrawal from the campaign. Vice President Kamala Harris, the favorite for the Democratic nomination for President, is now the hope of the Democrats. Whether she can actually defeat the Republican candidate Donald Trump in November remains to be seen. The outcome of the elections could have significant influence on the stock markets, especially with regard to titles from the banking or energy sector, which are heavily dependent on political measures from the government.
Here's an overview of how stocks and sectors could react if Trump were to serve a second term as President:
Financial Industry
If Trump decides to run for the White House again, according to UBS analysts, bank stocks like JPMorgan Chase, Bank of America, Wells Fargo, Discover Financial, KeyCorp, or Synchrony Financial could see a boost. Experts predict that under Trump, there will be fewer stringent capital and liquidity requirements and a relaxation of financial regulation. Under President Biden, financial regulation had been a top priority in recent years - even cryptocurrency companies were more closely regulated. Industry experts assume that a President Harris would continue this course.
Cryptocurrencies
Values from the cryptocurrency sector and companies dealing with Bitcoin & Co and the underlying blockchain technology could also benefit from a Trump return to the White House, according to stock market experts. "Investors are hoping for a relaxation of regulatory headwinds in the US," said Timo Emden of Emden Research. Trump is seen as a supporter of the crypto industry in investor circles. "With Trump at the helm, the US could gradually expand its dominance in the crypto market."
Cryptocurrency stocks like Coinbase, Marathon Digital, and Riot Platforms have seen significant increases since the failed assassination attempt on the former President in mid-July.
Renewable Energy
US President Biden has made the protection of the environment a central part of his economic plans. Since he introduced a billion-dollar funding package - the Inflation Reduction Act - in 2022, more than 40 projects for solar equipment in the US are planned. The incentives have benefited companies such as First Solar.
However, according to Commerzbank analysts, it is still unclear whether under a Trump administration, the promotion of renewable energy would be radically scaled back - "even if the program promises to end the 'socialist Green Deal'." After all, Republican-governed states like Texas are significant beneficiaries of this policy.
Oil Companies
A new Trump administration would focus more on fossil fuels than on green energy and climate change mitigation, according to JP Morgan analysts. Higher oil and natural gas investments, more drilling activities, and natural gas exports could therefore give a boost to producers like Exxon Mobil, Cheniere Energy, and ConocoPhillips. Continued support for electrification and the production of cleaner fuels, which is more likely under a democratic administration, could give a boost to stocks like Tesla, Quanta Services, or Air Products and Chemicals.
Domestic Manufacturers
A second Trump term could lead to increased demand for domestic manufacturers, as the administration is expected to prioritize 'Buy American' policies and reduce imports. This could benefit companies like General Electric, Caterpillar, and 3M. However, it could also lead to higher raw material costs and increased competition from domestic rivals.
Biden and Trump, in large quantities, have implemented tariffs to protect US industry. It is expected that a new Trump administration will be significantly more protectionist. As a Republican candidate, Trump proposed tariffs of 60% or more on all Chinese goods and the idea of a general tariff of at least 10% on all imports.
"The sector of cyclical consumer goods is particularly threatened in this environment," summarize UBS analysts. US tariffs on Chinese imports could help domestic auto manufacturers like Ford and General Motors, as well as steel producers like Nucor and Steel Dynamics.
Given the fierce competition with China in the semiconductor industry, UBS also expects a second Trump administration to push for support for domestic semiconductor manufacturers like Applied Materials, KLA Corp, Intel, and Texas Instruments.
Trump Stocks
If Trump wins the White House race, according to experts, the stocks of companies associated with him could potentially gain. This includes the papers of his media company Trump Media & Technology or the stocks of software developer Phunware. Phunware was contracted by Trump's campaign in 2020 to develop a mobile app. The stocks of video-sharing platform Rumble, popular among US conservatives, could also potentially benefit from Trump 2.0.
Prison Operators
Given Trump's promise to be a tough next US President on illegal immigration and to toughen up law enforcement, Borse investors see US prison operators like Geo Group and CoreCivic in the limelight in case of a Republican victory. The demand for detention facilities could increase under Trump 2.0.
Agriculture
Facing the prospect of a trade war with China under Trump, Borse investors expect farmers to receive more government support for lost exports. These initiatives could help farm equipment manufacturers and suppliers like Deere & Co and Tractor Supply Company, predict the UBS analysts.
If Donald Trump wins the US Presidential Election in 2024, as suggested by some analysts, bank stocks like JPMorgan Chase, Bank of America, Wells Fargo, Discover Financial, KeyCorp, or Synchrony Financial could see a boost due to potentially fewer stringent capital and liquidity requirements and a relaxation of financial regulation under his presidency. On the other hand, if Vice President Kamala Harris becomes the US President, industry experts assume that she would continue the course of stricter financial regulation, similar to President Biden's administration.
In the context of the cryptocurrency sector, a Trump return to the White House could potentially lead to a relaxation of regulatory headwinds, benefiting companies such as Coinbase, Marathon Digital, and Riot Platforms, according to stock market experts. Trump is seen as a supporter of the crypto industry in investor circles.
