"Trump Trade" Sweeps the Market - Master the Latest Deployment Opportunities

The recent buzz surrounding former U.S. President Donald Trump has heightened expectations of his potential victory in the upcoming U.S. presidential election. As a result, the market has once again witnessed the emergence of the "Trump Trade."

For the first time, the yield on 30-year Treasury bonds has exceeded that on 2-year bonds, the futures of the three major U.S. stock indices have collectively risen, and the price of Bitcoin has surged past $60,000.

Today, we will share how to navigate the "Trump Trade" and find potential investment opportunities amid this wave of enthusiasm.

Since Trump became the 45th President of the United States, the "Trump Trade" has frequently appeared in financial markets. It generally refers to the market's anticipated reactions to fiscal, trade, and regulatory policies that Trump might implement during his presidency.

These policies include tax cuts, financial deregulation, and other measures that often lead to specific volatility patterns in financial markets. Essentially, the "Trump Trade" is a market expectation-driven trading model.

This term actually emerged as early as 2016. After the third U.S. presidential debate on October 19, 2016, Trump's polling support began to lead. By the end of that year, the market trading during that period, driven by expectations of Trump's expansionary fiscal policies and tightening trade policies, exhibited characteristics such as high interest rates, a strong dollar, and strong U.S. stocks.

Here, we outline three major directions of the "Trump Trade" and their respective characteristics:

These stocks are characterized by a lack of solid fundamental support and extreme price volatility, similar to meme stocks.

As of the close on July 15, DJT has a market cap of around $8 billion, Rumble around $2 billion, and Phunware less than $50 million.

After the recent shooting incident, the stock price of Trump's media and technology group surged by 75%.

MEME stocks are those that gain popularity on social media platforms.

Their main characteristics are high volatility, potential for short-term gains, high risks due to their detachment from company fundamentals, and susceptibility to social media sentiment.

The following are examples of popular Meme stocks:

Trump's policies, when he was in office, could benefit certain industries. These stocks usually have solid fundamental support and relatively smaller volatility. Typical industries include traditional energy, finance, insurance, and agricultural equipment.

During Trump's administration, a series of policies supporting the fossil fuel industry were implemented, including relaxing environmental regulations and encouraging energy extraction and production. These measures significantly benefited the oil, natural gas, and coal industries.

These stocks are in industries publicly supported by Trump, with cryptocurrencies being the most notable.

Thanks to Trump's favorable stance on digital cryptocurrencies, Bitcoin surged over 10% in a week, rising more than 5% in a single day to approximately $63,000 on July 15th.

Trump's supportive attitude towards cryptocurrencies has been a key factor in Bitcoin's recent rally.

Following Musk’s public endorsement, Tesla’s stock saw an upward trend post-Trump’s shooting incident.

Given these rapid phases, timing the market is crucial. When making investment decisions, it is essential to manage risks effectively.

Based on these policy directions, moomoo has compiled a list of some Trump-Election stocks (LIST22962.US) for users to consider.

Although Trump currently holds an advantage, nothing is set in stone with more than three months remaining until the U.S. elections.

Particularly, Trump-linked stocks might experience significant volatility. Investors might devise strategies based on the distinct characteristics of different segments of the "Trump Trade."