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What a Trump Win in 2024 Could Mean for Stocks? Keep an Eye on These Sectors
Former President Donald Trump defeated former South Carolina Gov. Nikki Haley in Tuesday's New Hampshire primary, moving closer to a general election rematch against President Biden.
The ex-president got 47.3% of the vote according to Real Clear Polling. While no one knows who will become president, some people on Wall Street are starting to envision the effects of a second Trump administration. This could have an impact on certain groups of stocks.
Defense
One likely winner would be defense, an area where Trump might well increase spending, though details of his policies aren't available at this stage of the campaign. The 2024 Department of Defense budget is about $842 billion.
“Defense is less Republican v Democrat than it used to be, but we believe a Trump presidency would focus on naval and submarine build-up as US-China tensions remain in focus,” according to Strategas analyst Daniel Clifton.
Investors in military and defense contractors, a sector that includes some companies that are growing rather slowly at the moment, wouldn't mind a boost.
$General Dynamics (GD.US)$ is expected to see sales of $46 billion this year, according to FactSet, with annualized growth of 3.7% to just under $50 billion by 2026.
$Lockheed Martin (LMT.US)$ is expected to see about $69 billion in revenue this year and $74 billion by 2026, for 3.6% annual growth.
$Northrop Grumman (NOC.US)$ l is expected to see $41 billion in sales this year and about $46 billion by 2026, for 5.9% annualized growth.
$RTX Corp (RTX.US)$ l is expected to see a slightly better growth - 6.7% a year - from $70 billion this year to $90 billion in 2026.
Additional military spending, which could materialize given attacks from Yemen on shipping in the Red Sea and continuing tension between the U.S. and China, would carry clearly positive implications for these stocks. "Winner: defense sector," wrote Isaac Boltansky, director of policy research at the investment banking firm BTIG.
Energy
Another sector that could outperform is energy.“At 13.3mnb/d, US crude production is near an all-time high. While we believe Trump would reduce regulatory uncertainty, it could also boost production further, hitting commodity prices. For that reason, we favor midstream companies along with coal and LNG exporters,” Clifton wrote.
Specifically, energy infrastructure firm $Kinder Morgan (KMI.US)$ ,fossil fuel companies like $Exxon Mobil (XOM.US)$ and $Energy Transfer (ET.US)$ stand to benefit.
Financial
Other area that could benefit could be banks. President Biden wants to create more stringent capital requirements for banks, while Trump wants to loosen those regulations.
Capital requirements under Basel III, an international agreement meant to ensure banks' soundness, could become tougher this year. That would mean banks have to hold capital equivalent to a higher percentage of their assets to ensure that they could ride out tough times.
Trump would like to roll back the amount, which would free up capital in the banking system to be lent. Easier regulation of the sector could raise the market's expectations for bank profits and help boost bank stocks. Considering this, $Wells Fargo & Co (WFC.US)$ , $Citigroup (C.US)$ , $Goldman Sachs (GS.US)$ , and $PNC Financial Services (PNC.US)$ could potentially benefit.
Small-caps
Moreover, a second term for Trump may result in significant alterations to trade policy. Trump has suggested imposing a blanket 10% tariff on imports, which could position small-cap stocks as potential beneficiaries.
According to Julian Emanuel, Chief Equity Strategist at Evercore ISI, small caps derive 79% of revenue in the U.S. versus the S&P 500's 59%, making them potentially relative winners on all imported goods.
Trump-linked equities
Also, Trump's prolonged momentum has fueled a speculative frenzy in a corner of the US equity market, setting off rallies in obscure stocks seen as tied to his candidacy.
Keep an eye on these sectors as the campaign moves ahead!
Source: CNBC, Barrons, Investing
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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71379804 : We will see the crash everyone waiting for because the government will stop printing money. You heard it here first
72984602 : No thank you, I will not put greed before country.
corey lambert : Trump 2024!
57AB : who cares about stocks, you are romancing with an insurrectionist because of money? indeed money is the root of all evil. an insurrectionist who has been convicted and fined for sexual violating women in broad daylight inside a store. we are talking about the chairman of the board of "jews will not replace us" inc.
71780680 : I never in my life time though I would see so much energy, and hope to elect a person that has shown he can't tell the truth, extremely racist, has more court appearance then campaign dates. But it just showes where we are as a society.
hechunqing69 57AB : Money is not the root of all evil; the source of all evil is human nature.
hechunqing69 71780680 : The amount of time spent in court does not convict a person.
71780680 hechunqing69 : I guess thow morals out the window to,,, At one time it meant something . buy I guess everyone likes mass Kaos.
Mark Lerch hechunqing69 : The bible (1 Timothy 6:10) actually was written to say "For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows." It is not money itself, but the love of money, which could be interpreted as human nature.
Ultratech : guy admitted on tape he purposely downplayed covid. people still brainwashed by him. steals documents, shares nuclear secrets. rapes minors with epstein. ultimately this is people doomed to spend eternity in hell blind to the difference between good and evil supporting a pathological liar. Biden sucks I'm the first to admit it. who cares about Biden too many sold their souls to trump who only cares about himself. bunch of useful idiots out there. absolutely shameful
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