· A Trump victory in 2024 could lead to policy shifts favoring specific sectors like energy, finance, and manufacturing.
· Key stocks like ExxonMobil (NYSE: XOM), Tesla (NASDAQ: TSLA), and GEO Group (NYSE: GEO) may benefit from deregulation and shifts in federal priorities.
· Crypto and regional banks could see a resurgence with a pro-business, less-regulated environment.
As the 2024 presidential election draws closer, Wall Street is already positioning for potential outcomes. A win for former President Donald Trump could reshape the market landscape, favoring certain sectors over others. While Trump’s administration can’t directly pick winners, his policies are likely to have a significant influence on market sentiment, guiding investors toward specific opportunities. Here’s a breakdown of the sectors that might thrive under another Trump term.
Energy: Reviving Traditional Resources
Under Trump, energy companies could see a return to less restrictive policies. Expect an emphasis on oil and gas as the focus shifts from the renewable energy push seen under the Biden administration. Companies like ExxonMobil (NYSE: XOM) and EQT Corporation (NYSE: EQT) could benefit from a more favorable regulatory environment, especially with the removal of the pause on new licenses for liquefied natural gas exports. Even coal producers like Peabody Energy (NYSE: BTU) are seeing positive sentiment in anticipation of increased domestic production.
While Trump’s approach to energy is generally supportive of fossil fuels, his stance on electric vehicles (EVs) is more nuanced. He has criticized federal subsidies for EVs but has maintained a close relationship with Tesla (NASDAQ: TSLA) founder Elon Musk. Some analysts believe that despite the cutback on EV mandates, Tesla could still thrive due to its scale and ability to adapt to market changes without relying heavily on subsidies. Additionally, higher tariffs on Chinese imports could shield Tesla from lower-cost competitors in the U.S. market.
Financials: Easing Regulations and a Pro-Business Approach
One area where a Trump administration could have a significant impact is financial services. Trump’s track record suggests a move toward deregulation, which could benefit banks and M&A-focused companies. Regional banks, in particular, could see less stringent capital requirements, making it easier to navigate market conditions. Expect stocks like Lazard (NYSE: LAZ), Moelis & Company (NYSE: MC), and Evercore (NYSE: EVR) to benefit from a friendlier environment for mergers and acquisitions.
In addition, Trump’s potential changes at the Federal Trade Commission and the Department of Justice’s antitrust division could open the door to more business-friendly policies, providing a boost to companies like Live Nation (NYSE: LYV) and even facilitating moves toward privatizing government-backed mortgage giants like Fannie Mae (OTC: FNMA) and Freddie Mac (OTC: FMCC).
Crypto: A Surprising Ally in the White House
Perhaps one of the most unexpected shifts in the Trump trade is the boost for Bitcoin and crypto stocks. Since the Republican candidate’s campaign announced support for Bitcoin donations, major crypto players like Riot Platforms (NASDAQ: RIOT) and Coinbase (NASDAQ: COIN) have surged. Additionally, Trump’s vice-presidential pick, JD Vance, has shown a pro-Bitcoin stance, which could signal a more open approach to the crypto market under a Trump administration. Read here for more info on stocks that could benefit from the rally in cryptocurrencies.
Investors betting on a Trump win should keep an eye on these trends as they unfold, understanding that policy shifts—though not guaranteed—can significantly impact market sentiment. For those seeking to ride the wave of a Trump trade, the time to position might be now.
Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.
