Wall Street is already betting on stocks that would benefit if former President Donald Trump returns to the White House.
Trump’s social media platform company (DJT) isn’t the only company whose stocks have risen following the assassination attempt on the Republican candidate and a damaging debate for Democratic President Joe Biden, which political analysts say boosted the GOP’s chances of victory.
Trump has dropped major hints about which industries he will prioritize if elected in November.
“Go for it, go for it, and close the border,” Trump said at the Republican National Convention on Thursday night.
Private prisons
Shares of private prison companies have soared over the past month following President Trump’s tough stance on illegal immigration and increased border security.
Shares of GEO Group (GEO), a Boca Raton, Fla.-based investor in private prisons, have risen more than 28% in the past month.
CoreCivic (CXW), formerly known as the Corrections Corporation of America, owns and manages private prisons and jails in the US. Shares of the company have risen more than 27% over the past month.
energy
Trump 2.0 will likely mean looser regulations on permitting and drilling.
“Republicans have a plan to bring prices down very quickly by making huge cuts to energy costs,” President Trump said at the party convention.
It’s worth noting that geopolitical risks and supply and demand can have a major impact on the performance of energy stocks. Yahoo Finance statistician Jared Brickle points out that under the Trump administration, the S&P 500 Energy Select ETF (XLE) fell 56% as oil demand plummeted during the pandemic.
By contrast, the XLE has risen 218% since Biden took office, with major stocks posting record gains as Russia’s invasion of Ukraine sent oil futures prices soaring.
Matt Stefani, president of Cavanal Hill Investment Management, said a Trump administration could lower costs for companies, especially around permitting, making oil companies more profitable, but he doesn’t think that will translate into more supply.
“I don’t believe [oil companies] “They’re incentivized to produce more,” Stefani said. “The industry has consolidated and prioritized profits over growth.”
The strategists said a Trump presidency “will likely be positive for energy stock valuations as investors drive up terminal values, meaning oil won’t become obsolete as quickly as some feared.”
Oil and gas producer Exxon Mobil (XOM) and natural gas supplier EQT Corporation (EQT) are among the stocks expected to benefit from the Trump administration’s intention to lift a moratorium on new licenses for liquefied natural gas exports, according to analysts at Evercore ISI.
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Shares of coal producer Peabody Energy (BTU) and steelmaker Nucor (NUE) rose on the prospect of increased manufacturing activity in the U.S. Both companies have risen about 7% since the presidential debate in late June.
EV
At the Republican Convention, Trump signaled his intention to roll back Biden’s clean energy policies, particularly EVs.
“On day one, I will repeal the electric vehicle mandate, thereby saving the American auto industry from total extinction,” President Trump said Thursday.
Republican presidential candidate and former president Donald Trump arrives at the 2024 Republican National Convention at Fiserv Forum in Milwaukee, Thursday, July 18, 2024. (Photo by Associated Press/Carolyn Custer) (The Associated Press)
While the former president has taken a tough stance on EVs, some analysts say Tesla (TSLA) could be an exception.
“Trump 2.0 could potentially be beneficial given Musk’s close relationship with Trump,” Sarah Bianchi, a policy analyst at Evercore ISI, said in a recent note.
Wedbush Tesla bull Dan Ives believes that even in a subsidy-free environment, “Tesla has unmatched scale and reach” in the EV industry.
The analyst also said China’s tariffs “will continue to deter cheaper Chinese EV makers from flooding the U.S. market for years to come.”
Bitcoin and Crypto Stocks
Bitcoin (BTC-US) has risen about 10% since the July 13 assassination attempt and is hovering around $65,000 per token.
Trump’s support for cryptocurrencies marks a shift from his stance as president. In May, the Trump campaign announced it would begin accepting donations in Bitcoin.
The former president is scheduled to speak at the Bitcoin Conference in Nashville, Tennessee on July 27, in what will be a pivotal moment for the cryptocurrency industry.
Crypto bulls also point out that Trump’s running mate, J.D. Vance, is a Bitcoin supporter, judging by the Ohio senator’s financial disclosure last year.
Over the past 10 days, crypto stocks Riot Platforms (RIOT), Microstrategy (MSTR), and Coinbase (COIN) have surged 35%, 21%, and 16%, respectively.
Finance, M&A stocks
Banks, particularly regional banks, stand to benefit from a Trump victory that is expected to “ease capital and liquidity regulations for banks,” Evercore ISI’s Bianchi said.
Investors also expect changes to the Federal Trade Commission and the Justice Department’s antitrust division under a Republican administration.
“It will create a much more favorable environment for M&A,” Isaac Boltanski, director of policy research at BTIG, told Yahoo Finance last week.
Shares of mergers and acquisitions firms Lazard (LAZ), Moelis (MC), and Evercore (EVR) have all seen double-digit gains since the June 27 presidential debate.
The Trump administration may also consider dropping the Department of Justice’s antitrust lawsuit against Live Nation (LYV), whose shares have risen more than 5% since late June.
Freddie Mac and Fannie Mae
Government-sponsored mortgage companies Fannie Mae (FNM.SG) and Freddie Mac (FHL.SG) have long been targets for privatization by President Trump, and together they back roughly half of all U.S. home loans.
“There will be a clear movement to remove Fannie Mae and Freddie Mac, the mortgage flagships, from control. This is a focus not just of Donald Trump but the Republican Party as a whole,” BTIG’s Boltanski said in a recent live interview with Yahoo Finance.
Freddie Mac shares are up more than 60% so far this year. Shares are up more than 6% in the past month. Fannie Mae shares are up 34% so far this year and are up more than 7% in the past month.
Inés Ferré is a senior business reporter at Yahoo Finance. Follow her on X. Follow.