We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Trump Wins Election: What Does it Mean for Stocks?
The U.S. presidential election is in the books, and former President Donald J. Trump will again assume the White House against all odds. As with all elections, roughly half of the country is elated, while the other half is thoroughly disappointed. Unfortunately, firmly held political beliefs mixes with investing like oil mixes with water. Regardless of where we land on the political spectrum, it’s our job as investors to separate our emotions from our investing framework and view the market in a cold, calculated manner.
U.S. Stocks Mostly Rise Regardless of Who is in Office
The truth is that, outside of Black Swan events like the Great Depression and the Global Financial Crisis, U.S. equities tend to rise over time, regardless of which political party takes the White House. Below is an outstanding infographic from Ryan Detrick of Carson Investment Research that illustrates the power of the American stock market.
Image Source: Carson Investment Research, Factset
Though investors who index will be happy to know that news, active stock pickers must drill deeper into specific industries and understand how a new president will likely impact them. Below are five industries to watch in President Donald Trump’s second term:
Crypto: Gensler is Gone
When it became evident that Trump would reclaim the White House Tuesday, Bitcoin jumped above $75,000 for the first time. A key reason for the move is the likelihood of a change at the head of the Securities and Exchange Commission. Speaking at a Bitcoin conference a few months ago, Trump promised to replace Gary Gensler as the chair of the SEC. Gensler is widely seen as anti-crypto by investors. Crypto exchange Coinbase ((COIN - Free Report) ) soared more than 30% on the news.
Image Source: TradingView
Solar: No More Subsidies?
Solar was one of the few weak industries in Tuesday’s Session. Trump has promised to cut back or eliminate most clean energy subsidies, which is bearish for stocks like First Solar ((FSLR - Free Report) ).
Tariffs and Small Caps
One of Trump’s highest convictions on the economic front is to leverage tariffs on foreign countries to force companies to bring back jobs to America. Trump has stated numerous times that he is a “tariff man” and he plans to implement a reciprocal tariff on any country imposing one on the U.S. These “protectionist” policies are bullish for small-cap stocks because countries like China will have difficulty shipping goods to America if consumers are forced to pay more for goods. The Russell 2000 Index ETF ((IWM - Free Report) ) soared more than 5% in reaction to the election results.
Pharmaceuticals: RFK Plans to "MAHA"
Independent candidate Robert F Kennedy joined forces with Trump to defeat Kamala Harris. In return for his endorsement, it appears Trump will appoint RFK to a significant role in the health department so he can “Make America Healthy Again.” Kennedy is controversial for linking various vaccines with autism and other adverse health conditions. With that in mind, it’s safe to assume that Pfizer ((PFE - Free Report) ) and other vaccine makers will likely face heavier scrutiny in the coming Trump administration.
Energy: "Liquid Gold"
President Trump has touted that the U.S. has more “liquid gold” than any other country, and wants to “drill baby, drill.” In other words, Trump will look to deregulate the oil and gas industry and encourage drilling. Tuesday, the Energy Select Sector SPDR ETF ((XLE - Free Report) ) gushed higher by 4% on heavy volume.
Bottom Line
Equities usually rise regardless of who assumes the White House. However, savvy, active investors understand the importance of analyzing specific industries under a new administration.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
5 Industries to Watch in a Trump Administration
Trump Wins Election: What Does it Mean for Stocks?
The U.S. presidential election is in the books, and former President Donald J. Trump will again assume the White House against all odds. As with all elections, roughly half of the country is elated, while the other half is thoroughly disappointed. Unfortunately, firmly held political beliefs mixes with investing like oil mixes with water. Regardless of where we land on the political spectrum, it’s our job as investors to separate our emotions from our investing framework and view the market in a cold, calculated manner.
U.S. Stocks Mostly Rise Regardless of Who is in Office
The truth is that, outside of Black Swan events like the Great Depression and the Global Financial Crisis, U.S. equities tend to rise over time, regardless of which political party takes the White House. Below is an outstanding infographic from Ryan Detrick of Carson Investment Research that illustrates the power of the American stock market.
Image Source: Carson Investment Research, Factset
Though investors who index will be happy to know that news, active stock pickers must drill deeper into specific industries and understand how a new president will likely impact them. Below are five industries to watch in President Donald Trump’s second term:
Crypto: Gensler is Gone
When it became evident that Trump would reclaim the White House Tuesday, Bitcoin jumped above $75,000 for the first time. A key reason for the move is the likelihood of a change at the head of the Securities and Exchange Commission. Speaking at a Bitcoin conference a few months ago, Trump promised to replace Gary Gensler as the chair of the SEC. Gensler is widely seen as anti-crypto by investors. Crypto exchange Coinbase ((COIN - Free Report) ) soared more than 30% on the news.
Image Source: TradingView
Solar: No More Subsidies?
Solar was one of the few weak industries in Tuesday’s Session. Trump has promised to cut back or eliminate most clean energy subsidies, which is bearish for stocks like First Solar ((FSLR - Free Report) ).
Tariffs and Small Caps
One of Trump’s highest convictions on the economic front is to leverage tariffs on foreign countries to force companies to bring back jobs to America. Trump has stated numerous times that he is a “tariff man” and he plans to implement a reciprocal tariff on any country imposing one on the U.S. These “protectionist” policies are bullish for small-cap stocks because countries like China will have difficulty shipping goods to America if consumers are forced to pay more for goods. The Russell 2000 Index ETF ((IWM - Free Report) ) soared more than 5% in reaction to the election results.
Pharmaceuticals: RFK Plans to "MAHA"
Independent candidate Robert F Kennedy joined forces with Trump to defeat Kamala Harris. In return for his endorsement, it appears Trump will appoint RFK to a significant role in the health department so he can “Make America Healthy Again.” Kennedy is controversial for linking various vaccines with autism and other adverse health conditions. With that in mind, it’s safe to assume that Pfizer ((PFE - Free Report) ) and other vaccine makers will likely face heavier scrutiny in the coming Trump administration.
Energy: "Liquid Gold"
President Trump has touted that the U.S. has more “liquid gold” than any other country, and wants to “drill baby, drill.” In other words, Trump will look to deregulate the oil and gas industry and encourage drilling. Tuesday, the Energy Select Sector SPDR ETF ((XLE - Free Report) ) gushed higher by 4% on heavy volume.
Bottom Line
Equities usually rise regardless of who assumes the White House. However, savvy, active investors understand the importance of analyzing specific industries under a new administration.