Whether you’re an investor who keeps it neutral regarding politics or not, being mindful of policies that may affect certain areas of the economy is still beneficial and sometimes necessary.
Markets tend to run up in an election year and with Donald Trump announcing JD Vance as his running mate on Monday, investors may be wondering which stocks could benefit if he is potentially reelected to office.
Of course, attention to this scenario was magnified following a heinous assassination attempt on the former president over the weekend before his official nomination by the Republican Party.
Garnishing more support since the senseless attack, some pundits believe markets are starting to price in a potential Trump presidency, prompting us to feature a few stocks and industries that stand to benefit from such an outcome.
We should keep in mind however that election day isn’t exactly next week, so the market’s assessment of each side’s electoral success will ebb and flow in the days ahead.
History tells us that presidential candidates typically get a boost from the favorable media focus and pageantry associated with the nominating conventions. Mr. Trump is benefiting at present from the ongoing GOP convention and we can expect something similar to happen once the time comes for President Biden’s nomination convention.
That said, we discuss here a few stocks that should be kept in mind for the potential Trump presidency. We will do a similar feature in the days ahead that will look for stocks that are well-positioned for President Biden’s reelection.
Trump Media & Technology DJT
More than any other publicly traded company, this stock has emerged as a play on the former president’s electoral fortunes. Mr. Trump is not only the company’s majority shareholder, but also uses the DJT’s core product, Truth Social, as his primary communication platform.
This stock is not for everyone and remains extremely volatile and speculative. The company neither has any meaningful operating revenues at this stage or even a long-enough operating history, so the stock may not be appropriate for most investors. There are no consensus EPS and revenue estimates for DJT at the moment, since no Wall Street analysts covers it at present. That’s the reason why Zacks doesn’t have a rating for DJT either.
The stock has done reasonably well over the past year, as the one-year performance chart below shows, but DJT is extremely volatile given its almost speculative underlying business and short public life.
Image Source: Zacks Investment Research
Investment Banks & Mergers
Some analysts, including famed CNBC contributor Jim Cramer, believe the finance sector will be a prime beneficiary if Trump retakes office. Notably, Cramer pointed to the notion that regulations on mergers and acquisitions (M&A) may be more relaxed under Trump than Biden which may bode well for big investment banks such as JPMorgan JPM, Goldman Sachs GS, Morgan Stanley MS, and Bank of America BAC.
Notably, Bank of America’s stock has soared +31% this year and hit a two-year high on Tuesday after exceeding Q2 top and bottom line expectations.
In regards to M&A, Cramer also alluded to the possibility of Kroger’s KR acquisition of Albertsons ACI going through among others. The Biden administration has opposed the merger due to monopoly concerns that could potentially lead to higher grocery prices with it being noteworthy that the acquisition stock price of $34.10 is 72% above Albertsons’ current price tag of $19 a share.
Crypto Stocks
The price of Bitcoin has spiked this week with a potential Trump presidency being viewed as positive for a softer regulation of cryptocurrency as well. Some of the notable stocks to keep an eye on in this regard are Coinbase Global COIN, Block SQ, and Marathon Digital MARA.
1-Week Price Performance of Bitcoin
Image Source: TradingView
Final Thoughts
There are pros and cons to every administration’s policies and while these stocks could benefit from a potential Trump presidency, there could be more downside risk in Chinese equities as the former president has favored a high tariff policy toward China.
Thankfully, the broader market tends to go up either way in an election year regardless of the incumbent president or their predecessor.
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Bank of America Corporation (BAC) : Free Stock Analysis Report
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Morgan Stanley (MS) : Free Stock Analysis Report
Trump Media & Technology Group Corp. (DJT): Free Stock Analysis Report
The Kroger Co. (KR) : Free Stock Analysis Report
Albertsons Companies, Inc. (ACI) : Free Stock Analysis Report
Block, Inc. (SQ) : Free Stock Analysis Report
Marathon Digital Holdings, Inc. (MARA) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
