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 (CVXcould 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.

Coinbase and Marathon Digital’s stock skyrocketed +31% and +19% on Wednesday respectively with Block shares up +7%.


Image Source: Trading Economics

Tesla – EV Makers

Being buddies with the President has its perks and Tesla TSLA CEO Elon Musk was one of Trump’s largest campaign supporters, donating over $100 million. As reported by BBC News, Trump has stated he would offer Musk a position in his administration to eliminate government waste under a cabinet themed the “Department of Government Efficiency” or DOGE.

More tax credit incentives for Tesla and other EV makers could help boost their profitability with BBC pointing out that Musk could also benefit from Trump’s presidency through his ownership of SpaceX, which dominates the business of sending government satellites to space.

Tesla shares climbed +15% to new 52-week highs of $289 a share and covets a Zacks Rank #1 (Strong Buy) with many analysts starting to increase their earnings outlook for the EV leader.

Zacks Investment Research
Image Source: Zacks Investment Research

 

Honorable Mention – Trump Meda Stock 

Trump Media & Technology (DJT) is a direct play on Trumps electoral fortunes. As the company’s majority shareholder, Trump also uses the DJT’s core product, Truth Social, as his primary communication platform.

This stock is not for everyone and remains extremely volatile and speculative. More of a meme stock than a foundational investment, Trump Media doesn’t have meaningful operating revenues at this stage or even a long enough operating history, which is why it doesn’t have a Zacks Rank. However, DJT rose +6% on Wednesday and has soared over +100% this year. 

Zacks Names #1 Semiconductor Stock

It’s only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.

With strong earnings growth and an expanding customer base, it’s positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.

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Tesla, Inc. (TSLA) : Free Stock Analysis Report

Coinbase Global, Inc. (COIN) : Free Stock Analysis Report

The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report

Wells Fargo & Company (WFC) : Free Stock Analysis Report

JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report

Chevron Corporation (CVX) : Free Stock Analysis Report

Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

The Kroger Co. (KR) : Free Stock Analysis Report

Albertsons Companies, Inc. (ACI) : Free Stock Analysis Report

Block, Inc. (SQ) : Free Stock Analysis Report

Marathon Digital Holdings, Inc. (MARA) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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