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- 🇺🇸 Market Hits Record Highs After Trump Victory
🇺🇸 Market Hits Record Highs After Trump Victory
A breakdown of the biggest market winners and losers from the Trump presidency
Maxwell Nicholson
November 10, 2024
TOP STORY
🇺🇸 Market Hits Record Highs After Trump Victory
🇺🇸 Unless you’ve been hiding in a cave, you’ve no doubt seen the news - Donald Trump has been named the 47th President of the United States.
📈 And while I’ll leave the politics to the other commentators, the news had a MAJOR impact on the stock markets, causing all three major indexes to hit record highs and Trump-related stocks and industries to soar:
📊 S&P 500: +4.7% this week
🤖 Nasdaq: +5.9% this week
🚗 Tesla: +31.5% this week
🪙 Bitcoin: +12.5% this week
🇺🇸 Truth Social ($DJT): +55.1% this month
In fact, the post-election day rise was the best in history, with the S&P climbing 2.5%.
👀 So let’s take a look at which sectors won and lost on the Trump victory and what a Trump presidency means for the markets moving forward!
🙋♂️ Before we get into it, a quick reminder that I’ll be hosting a live stream on Tuesday at 4pm EST on the topic “🤖 AI & The Markets: Bubble or Boom?” with YouTuber Daniel Pronk and the founder of Finchat Braden Dennis! Don’t forget to register here - hope to see you there!! 😊
🏆 Sectors That Won and Why
🏦 Banks & Financials
Dow Jones U.S. Financials Index: +5.5% this week
SPDR S&P Bank ETF (KBE): +10.0% this week
JP Morgan ($JPM): +6.0% this week
Bank of America ($BAC): +8.3% this week
The first sector that soared on the Trump win was Banks and Financials, as the markets are banking (no pun intended 😉) on Trump to decrease regulatory costs, lower capital requirements, allow more mergers and acquisitions, and pull back Consumer Financial Protection Bureau oversight.
🛢️ Energy / Oil and Gas
Energy Sector Select SPDR ($XLE): +5.7% this week
Exxon Mobil ($XOM): +4.4% this week
Kinder Morgan ($KMI): +10.9% this week
Energy was another huge winner, as Trump has embraced the fossil fuels industry and promised to "drill, baby, drill." During his campaign, Trump also promised to open up more land to drilling and reduce environmental rules and is widely expected to open up more oil and gas leases in the Gulf of Mexico.
🪙 Crypto
Bitcoin: +12.5% this week
Ethereum: +28.6% this week
Coinbase: +50.1% this week
Crypto soared off the Trump win, with Bitcoin setting a new all-time high, as many expect Trump to drive a pro-crypto environment with favorable regulation. Trump made a number of crypto-related promises during the campaign, including:
Keep 100% of the bitcoin the US holds or acquires
Fire SEC Chairman Gary Gensler (who has taken an aggressive stance on crypto regulation)
Create a Bitcoin and crypto presidential advisory council
Ensure crypto is mined in the US
“The rules will be written by people who love your industry, not hate your industry”
🤖 Technology
NASDAQ-100 Technology Sector: +6.1% this week
Google ($GOOG): +5.1% this week
Intel ($INTC): +14.3% this week
Palantir ($PLTR): +42.2% this week
Finally, tech - a sector where many high-profile executives like Musk and Peter Thiel were hoping for a Trump victory. Overall, tech saw a bump as many expect Trump to ease antitrust pressures on companies like Google (which is facing a potential break-up by the DOJ).
On the day after the Trump victory, Intel soared 6.6%, and competitor Taiwan Semiconductor fell -4% as Trump is expected to impose tariffs on TSM (but recovered from the drop later in the week).
🔫 And finally, Palantir, a company that was already surging on the back of an incredible earnings report, got a 9.6% election day boost as a large part of its revenue comes from government defense contracts.
🚘 Tesla
Last but not least, Elon had a great week, with Tesla soaring +11% the day after the election (and +31.5% this week) after Trump called Elon a ‘super genius’ in his victory speech.
Elon was heavily involved in the Trump campaign, donating more than $100 million and spending weeks campaigning in swing states ahead of the election.
Musk’s direct line to the president will no doubt be an asset to his companies as he’ll likely be able to use his influence to help secure favorable government treatment (which Tesla is fairly dependent on, receiving $739M in automotive regulatory credits last quarter.).
📈 Overall, the markets have responded exceptionally well to the Trump win, with David Bahnsen, the Chief Investment Officer at The Bahnsen Group, summing things up nicely:
For now, investor sentiment is pro-growth, pro-deregulation, and pro-markets. There is also an assumption that M&A activity will pickup and that more tax cuts are coming or the existing ones will be extended. This creates a strong backdrop for stocks.
😰 But of course, not all companies and sectors benefited from Trump’s victory… before we look at the losers, a quick word from our sponsor Frontfundr!
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TOP STORY CONTINUED
😰 Sectors That Lost and Why
But of course, not all companies and sectors benefited from Trump’s victory - here are a few sectors that got hit hard:
♻️ Renewables
S&P Global Clean Energy Index: -6.1% this week
First Solar ($FSLR): -7.7% this week
Orsted ($DNNGY): -10.7% this week
Trump’s win was a blow to the green agenda of the Biden-Harris administration, which granted billions of incentives and tax breaks for clean energy.
Trump, in contrast, has embraced fossil fuels and vowed to scrap offshore wind products through an executive order on his first day in office. As a result, shares in Orsted, the largest offshore wind developer, plummeted by ~11% alongside wind turbine makers Vestas and Nordex.
🇨🇳 Chinese Stocks
Major US-listed Chinese stocks dropped on Wednesday as Trump has been quite vocal about his plan to implement tariffs at ‘levels unseen since the Great Depression,’ including 10%-20% tariffs across the board and a 60% tariff on goods from China.
On Thursday many of the stocks bounced back after a report showed China’s export growth surged in October to the fastest since July 2022, and many expected that Trump’s tariffs will ‘trigger a bigger stimulus’ from the Chinese government.
However, on Friday, the stimulus package that was announced was largely viewed as ‘not enough by investors’ and tanked the stocks even further:
KraneShares CSI China Internet ETF ($KWEB): -1.6% this week
Alibaba (BABA): -4.7% this week
JD.com (JD): -5.0% this week
🇩🇪 Foreign Car Makers
Volkswagen ($VWAG): -6.4% this week
Porsche ($DRPRY): -4.3% this week
Honda ($HMC): -11.8% this week
BYD ($BYDDY): -4.0 this week
Another industry that stands to hurt from the Trump tariffs is foreign automakers. Trump has said repeatedly that he will increase tariffs on new vehicles from China, Europe and Mexico, in an effort to bring manufacturing jobs back to the US, causing stocks to fall.
US car makers Ford ($F) and General Motors ($GM), which stand to benefit from the tariffs, jumped 7.1% and 8.7% respectively.
📸 The Bigger Picture
Zooming out, the headline of the week is the uncertainty is over, and the bull market is back and bigger than ever:
“Markets hate uncertainty and now that the election is officially over, stocks are soaring”
🤑 Overall, markets are pricing in a new business-friendly, tax-friendly regime, with the investor sentiment shifting from ‘Neutral’ to ‘Greed’ according to the Fear and Greed index, a popular measure of market sentiment.
😬 But not everyone is so optimistic. Some economists have raised concerns that Trump’s tariff plan will increase inflation and undercut the Fed’s rate-cutting efforts.
Many were also already saying the market was in bubble territory before the ‘Trump Pump,’ with the S&P trading at a 21.5x price-to-earning ratio, well above its historical average (see my video about that here). But as Barrons points out, even though the market may be expensive:
“Stocks can remain in bull mode for a long time, even when they are expensive”
📈 Whether this ‘bull mode’ will continue will depend on two main things: continued Fed rate cuts & AI performance, so make sure you join the live stream on Tuesday, where we’ll be diving deeper into those topics!
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💡 You can easily find these ETFs on Blossom and add them to your watchlist from the ETF Alerts widget on the Markets tab!
FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week
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