Trump Trade: Stocks to Watch as the Former President Retakes Office
Reclaiming the White House, Donald Trump defeated Kamala Harris to become the presidential elect as the 47th President of the United States.
While every administration's economic policies have pros and cons, the stock market reacted quite positively to the news with the S&P 500, Nasdaq, and Dow Jones all up over +2% on Wednesday.
After receiving 291 of the 270 electoral votes needed to retake office, let’s take a look at some of the stocks and sectors that may benefit from another Trump presidency.
"Drill Baby Drill" - Oil Stocks
Although oil stocks were mixed today, Trump has infamously expressed his objective of maintaining the U.S. as the largest petroleum and gas-producing nation in the world.
Investors may want to take Trump’s famous line “Drill baby drill” with a grain of salt in regards to increasing the exploration and production of oil which he themes as liquid gold.
That said, oil conglomerates like Exxon Mobil XOM and Chevron (CVX) could benefit from a Trump administration but it's noteworthy that the ladder currently lands a Zacks Rank #4 (Sell) based on a trend of declining earnings estimate revisions.
Financials - M & A
The financial sector saw quite a rally in Wednesday’s trading session with big banks leading the way. JPMorgan JPM and Wells Fargo’s WFC stock spiked over +10% as Trump’s policies are deemed more lenient toward the regulations of mergers and acquisitions which are facilitated by banks.
Goldman Sachs GS stock also popped more than +10% and ranks first in worldwide announced and completed mergers and acquisitions this year.
One M&A to watch specifically is Kroger’s KR proposed takeover of Albertsons ACI which has been opposed by the Biden administration. There are monopoly fears surrounding the two grocery chains coming together and a Trump presidency may be the only hope of the deal going through with Albertsons' stock rising +2% to $19 but still 79% from its acquisition price of $34.10 a share.
The Crypto Trade
Trump has been a strong supporter of the cryptocurrency market which fairs well for the regulation of the commodity. The price of Bitcoin hit new highs of over $76,000 today and is now sitting on +79% gains for the year.
Notably, Coinbase’s COIN stock currently sports a Zacks Rank #2 (Buy) as the largest cryptocurrency exchange platform in terms of volume. Meanwhile, point of sales (POS) solutions provider Block SQ is attractive in this regard as well and crypto miner Marathon Digital MARA may certainly be of interest.