💥 The Trump Rally is here

Good morning investors! The market hit a new high yesterday as investors flocked back after the Trump win.

Today we cover:

• Stocks that benefit from the Trump win

• More earnings reports

• What’s next for the economy

📊 Economy and News 

What Trump’s Planning

Donald Trump’s return to the U.S. presidency is expected to bring swift global economic impacts. Key policies like high tariffs, deregulation, and greater demands on NATO allies may strain government finances, fuel inflation, and affect growth and interest rates worldwide.

Proposed tariffs, such as a 10% universal import duty and a 60% tariff on Chinese goods, are expected to increase inflation in the U.S., potentially pushing the Federal Reserve to keep rates high. This would strengthen the dollar, creating challenges for emerging markets reliant on dollar-denominated debt.

Economies like Mexico and China could be hit hardest, with Mexico facing possible border restrictions and trade tensions. Europe might also feel added strain if U.S. support for NATO declines, requiring higher defense spending amid already stretched budgets. In short, Trump’s policies could reshape global trade dynamics, raising costs and limiting growth.

Global hits:

• Brits brace for higher mortgage payments despite Bank of England seen cutting rates.

• More Iran sanctions and ‘drill baby, drill’: Oil market’s future is still uncertain under Trump.

• Corporate bond spreads tighten slightly after Trump victory.

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📈 Stocks

S&P 500 5,929.04 (+2.53%)
DJIA 43,729.93 (+3.57%)
NASDAQ 18,983.46 (+2.95%)
BRENT CRUDE 74.22 (-0.57%)
* Prices as of Nov 7th, 12:20 AM UTC

That Exciting Election Fallout

U.S. stocks soared Wednesday as Donald Trump was elected the 47th President of the United States, while the Republicans were on course to sweep the Senate and the House.

Here are major winners:

• Tesla jumps 15% as Trump-backer Musk seen benefiting from White House win.

• Bitcoin had a great day jumping over 7% and crossing $75,000 for the first time.

• Coin related stocks also had a great time with jumping early 30% and MARA Holdings growing about 20%.

• Shares in private prison companies, including GEO Group (GEO) and CoreCivic (CXW), jumped over 30% on Wednesday. Investors expect Trump’s potential return to office could lead to stricter immigration enforcement, reversing Biden’s policy allowing asylum seekers to work while awaiting trial.

• Bank stocks surged with JPMorgan Chase (JPM), Goldman Sachs (GS), and Citigroup (C) all up over 10%, as investors anticipated a rollback of Biden’s strict capital requirements for banks. Discover Financial Services (DFS) saw a nearly 20% rise, along with a 14% increase for Capital One (COF), on optimism that their proposed merger would proceed more smoothly under a Republican-led administration.

A Fall: Retailers like Five Below (FIVE), Wayfair (W), and Dollar General (DG), along with toy makers Mattel (MAT) and Hasbro (HAS), saw declines amid fears that Trump’s tariffs could increase the cost of imported goods.

Green energy stocks saw some of the biggest declines for the day, as Trump is expected to prioritize fossil fuel energy production over other energy sources seen as more environmentally friendly. Shares of solar panel companies Sunnova (NOVA) and Sunrun (RUN) dropped by 50% and 30% Wednesday, respectively.

💵 Personal Finance

What Experts Say Could Happen Now That Trump Has Won

Here are some predictions:

US Stocks: With Trump’s pro-business approach, there’s potential for tax cuts and increased trade barriers, which could attract more capital into the United States. This shift might drive US stock indices higher as investor confidence in American markets grows.

US Dollar: The dollar could see heightened demand, particularly if trade tensions escalate, which would add a risk premium. This environment could push the DXY index back toward its 2022 peaks, as investors seek stability in the US currency.

Hydrocarbon Companies: Given Republican support for the hydrocarbon industry, energy companies may experience stronger investment inflows and expanded operations, benefiting from favorable policies.

Gold: If inflation rises under Trump’s economic policies, the Federal Reserve may respond with rate hikes. This could reduce gold’s appeal as a safe haven, exerting downward pressure on its price as the dollar strengthens.

However, differences exist. Here’s a quote from a CNN blog:

“Inflation is likely to rise in the United States and around the world if newly elected US President Donald Trump follows through on his campaign promises to cut taxes, crack down on immigration.”

The best thing we can do is wait for announcements.

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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