Wall Street is already making bets on stocks that stand to benefit if former President Donald Trump is voted back into the White House.
Trump’s social media platform company (DJT) isn’t the only stock that has climbed following an assassination attempt on the Republican candidate and a damaging debate for Democratic President Joe Biden, which political analysts say have increased the chances of a Republican victory.
Trump has dropped big clues over which industries he’d favor if elected in November.
“Drill baby drill, and close our borders,” said Trump during the Republican convention on Thursday night.
Private prisons
Private prison companies soared over the past month given Trump’s tough stance on illegal immigration and increased border patrol.
Shares of GEO Group (GEO), a Boca Raton, Fla.-based company that invests in private prisons, have risen more than 28% over the past month.
CoreCivic (CXW), formerly the Corrections Corporation of America, owns and manages private prisons and detention centers in the US. The stock is up more than 27% over the past month.
Energy
Trump 2.0 would likely mean fewer restrictions on permits and drilling.
“Republicans have a plan to bring down prices and bring them down very, very rapidly by slashing energy costs,” Trump said at the convention.
It’s worth noting geopolitical risks and supply and demand may play a bigger role in how energy stocks perform. Yahoo Finance’s stats wizard Jared Blikre points out that during Trump’s administration, the S&P 500 Energy Select ETF (XLE) fell 56% as oil demand plunged during the pandemic.
By contrast, XLE soared 218% from the start of Biden’s presidency, with the majors posting record profits as Russia’s invasion of Ukraine sent crude futures skyrocketing.
Company costs, particularly around permitting, could decline under a Trump presidency, making oil companies more profitable, says Matt Stephani, president at Cavanal Hill Investment Management. However the strategist doesn’t think that will lead to more supply.
“I do not believe [oil companies] are incentivized to increase production,” said Stephani. “The industry has consolidated and has focused on returns rather than growth.”
The strategist says a Trump presidency “is likely positive for energy related equity valuations as investors bid up the terminal value — i.e. oil doesn’t become obsolete as quickly as some had feared.”
Oil and gas producer ExxonMobil (XOM) and natural gas provider EQT Corporation (EQT) are some of the stocks expected to benefit from the Trump campaign’s intent to lift the pause on new licenses for liquified natural gas exports, note Evercore ISI analysts.
Coal producer Peabody Energy (BTU) and steel company Nucor (NUE) have risen on the prospects of increased manufacturing in the US. Both are up roughly 7% since the presidential debate in late June.
EVs
At the Republican convention, Trump pointed out his intention to scale back Biden’s clean energy initiatives, particularly EVs.
“I will end the electric vehicle mandate on day one, thereby saving the US auto industry from complete obliteration,” said Trump on Thursday.
While the former president sounded tough on EVs, some analysts say Tesla (TSLA) could be an exception.
Trump 2.0 could be “potentially beneficial given Musk’s close relationship with Trump,” said Evercore ISI policy analyst Sarah Bianchi in a recent note.
Tesla bull Dan Ives of Wedbush believes “Tesla has the scale and scope that is unmatched” in the EV industry, even in a non-subsidy environment.
The analyst also said higher China tariffs “would continue to push away cheaper Chinese EV players” from flooding the US market in the coming years.
Bitcoin and cryptocurrency stocks
Bitcoin (BTC-US) has risen roughly 10% since the assassination attempt on July 13., hovering near $65,000 per token.
Trump’s support for the cryptocurrency is a shift from his position when he was president. In May Trump’s campaign said it would start accepting donations through bitcoin.
The former president is expected to speak at the Bitcoin Conference in Nashville, Tenn., on July 27, marking a pivotal moment for the cryptocurrency industry.
Crypto bulls have also pointed out Trump’s vice presidential ticket pick, JD Vance, is a bitcoiner, judging from the Ohio senator’s financial disclosure for last year.
Over the past 10 days, crypto-related stocks Riot Platforms (RIOT), Microstrategy (MSTR), and Coinbase (COIN) have soared 35%, 21%, and 16% respectively.
Financials, M&A stocks
Banks, particularly regionals, stand to benefit from a Trump victory given the expectation of “less stringent bank capital and liquidity regulation,” according to Evercore ISI’s Bianchi.
Investors also expect changes at the Federal Trade Commission and the Department of Justice’s antitrust division under a Republican presidency.
“You’ll have a much more hospitable climate for M&A,” Isaac Boltansky, BTIG director of policy research, told Yahoo Finance last week.
Shares of Lazard (LAZ), Moelis (MC), and Evercore (EVR), financial firms that provide mergers and acquisitions services, are all up double digit percentages since the presidential debate on June 27.
A Trump administration may also seek to drop the DOJ antitrust lawsuit against Live Nation (LYV). Shares of the entertainment company are up more than 5% since late June.
Freddie Mac and Fannie Mae
The government-sponsored mortgage enterprises Fannie Mae (FNM.SG) and Freddie Mac (FHL.SG) have long been Trump’s targets for privatization. The two companies back roughly half of all mortgages in the US.
‘There’s going to be a pronounced push to get Fannie and Freddie the mortgage signs out of conservatorship. That’s something that you have seen not only Donald Trump focus on, but really the entire Republican party,” BTIG’s Boltansky told Yahoo Finance recently in a live interview.
Year to date, Freddie Mac is up more than 60%. Shares have risen more than 6% over the past month. Fannie Mae shares have risen 34% since the start of the year and more than 7% over the past month.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
