On Tuesday local time, Trump won the New Hampshire election by “one more city” on his way to the 2024 presidential election. This victory also further strengthened his approval rating in the Republican Party.
Meanwhile, the “second decisive battle” between Trump and Biden is getting closer. In a tense US election year, people may be concerned about the final outcome of the Trump-Biden confrontation and the turmoil the market may face.
Trump's party won a landslide victory
According to US media reports, Trump is ahead of his last rival within the Republican Party — former UN Ambassador Haley — with 54.6%: 43.2% of the votes in this election.
According to the Associated Press's preliminary analysis of the poll results, the agency claims that Trump has won and is insurmountable ahead of another Republican candidate, Haley. The agency conducted simultaneous polls during Tuesday's primary election, which gave the poll leading guiding significance.
However, Haley, who was “defeated” this time, still vowed to continue her campaign.
We still have a long way to go, but we'll keep moving forward. New Hampshire is number one in the country, but it's not the last. This game is far from over. There are dozens of states left.
Trump's next competition with Haley is scheduled to be held on February 24 in South Carolina, where Haley was born and has served two terms as governor. However, despite having great connections with her, public opinion polls show that Trump is still far ahead in terms of support.
Biden is expected to face Trump again
On Tuesday, US President Joe Biden won the Democratic primary election in New Hampshire as a written candidate. Referring to Trump's “big victory” this time, Biden also said that he is expected to face Trump again in the election, and he continues to regard the election as a struggle for democracy.
It is now clear that Donald Trump will be the Republican nominee. My message to the nation is that the stakes couldn't be higher. Our democracy, our individual liberties — from the right to choose to vote, our economy — have seen the strongest recovery in the world since COVID-19. All of this is at risk.
Anastasia Amoroso, iCapital's chief investment officer, said that currently voters and the market will pay close attention to “Super Tuesday” on March 5, and nominations of candidates from both parties will be confirmed at that time.
In the US election year, investors will mostly worry about the election results and the turmoil the market may face. In response, Amoroso mentioned, “In the past eight election cycles, the S&P 500 index achieved median return rates of 7.5% and 4.2% in the 12 and 9 months before election day, respectively, and there is a possibility of an increase of 87% and 75%, respectively.”
According to iCapital's data, stock returns will gradually decline as the election cycle ends and peaks on election day. During the three months and one month before the election, the median return for the S&P 500 index was 0.5% and 0.8%, respectively. In both cases, the upside is about half as likely.
If Trump wins the election, which concept stocks will benefit?
Specifically, Wall Street generally believes that if Trump wins the election, he is likely to implement plans to cut taxes and relax government regulations. Furthermore, geopolitical risks are expected to increase, so we can focus on finance, defense, energy, etc.
Futu News has compiled a list of some of the companies that analysts believe will benefit as the election campaign unfolds for reference.
Financial stocks: The capital requirements of Basel III, an international agreement designed to ensure the soundness of banks, are likely to become more stringent this year. This would mean that banks would have to hold capital equal to a higher percentage of their assets. Biden wants to set stricter capital requirements for banks, while Trump wants to reduce this amount, which will free up capital in the banking system so they can lend.
With Trump winning the election, deregulation would benefit financial stocks. Wells Fargo recommends buying under these circumstances$Goldman Sachs (GS.US)$,$PNC Financial Services (PNC.US)$. BW's analysis team recommended holding$Wells Fargo & Co (WFC.US)$,$Citigroup (C.US)$. Additionally, Strategas analysts also recommended$Equifax (EFX.US)$.
Defense stocks: After Trump comes to power, it may drive geopolitical conflicts to intensify, and defense spending is expected to increase. According to Wells Fargo, this means$General Dynamics (GD.US)$,$Northrop Grumman (NOC.US)$,$Boeing (BA.US)$,$Lockheed Martin (LMT.US)$Wait for it to become a winner.
Energy stocks: Trump is likely to strongly support the development of energy companies, especially fossil fuel companies, after coming to power. According to Cornerstone Macro,$Exxon Mobil (XOM.US)$,$Energy Transfer (ET.US)$It would benefit in this case, and Strategas analysts also recommended$Kinder Morgan (KMI.US)$.
Small-cap stocks: Market-friendly tax and regulatory policies that Trump may implement after coming to power may benefit small companies, so Cornerstone Macro suggests portfolios can be included$iShares Russell 2000 ETF (IWM.US)$.
Trump concept stocks: As market confidence in Trump winning the primary election soars, Shell$Digital World Acquisition Corp (DWAC.US)$, a video sharing platform popular among American conservatives$Rumble (RUM.US)$, a software developer previously hired by the Trump campaign to develop mobile apps$Phunware (PHUN.US)$With the advent of a sharp rise, as Trump's chances of winning the election increase, there are still opportunities for these concept stocks.
Cow friends,
What do you think the chances are if Trump wins the election?
If it successfully “makes a comeback”, which targets will be profitable?
Welcome to leave your thoughts in the comments area~
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