Caixin News Network November 5th (Editor Xiaoxiang) On the eve of the U.S. election day, investors in the stock market, foreign exchange market, bond market, commodity market, and cryptocurrency market are undoubtedly once again focusing on a series of "Donald Trump trades."

Once there are signs during the election count process that Trump is likely to win the election, many traders may seize the opportunity by preemptively buying a series of "Donald Trump trades"; similarly, if Trump's prospects are unfavorable, shorting these trades will also become a "golden opportunity" in the eyes of many speculators...

In the past few months, I believe many investors have already had a long list of specific targets for a series of "Donald Trump trades" in their minds. And in general, it may mainly include the following:

Buy, which operates the social media platform "Truth Social" created by Trump; $Trump Media & Technology (DJT.US)$ Buy bitcoin, gold, and dollars;

Buy bitcoins, gold, and US dollars;

Sell US treasuries and Mexican pesos;

Buy US medical care stocks and prison stocks;

Buy bank stocks, especially regional banks;

Sell clean energy stocks;

Buy European defense stocks;

Buy US stocks, while selling stocks in other parts of the world...

So, among these "Donald Trump trades", which ones are truly effective "Donald Trump trades"? And which ones might be impostors or misrepresentations?

Renowned financial commentator James Mackintosh carried out an analysis on Monday. Mackintosh believes that in the past month or so, some "Donald Trump trades" have indeed been successful, but the logic is questionable, and some may have been at least partially incorrect; furthermore, some "Donald Trump trades" may be completely unreliable.

The market trend over the past month actually provided a perfect test opportunity. In the political gambling market, Trump and Harris were evenly matched in early October, but by the end of the month Trump had clearly taken the lead. According to people's understanding, "Trump trades" should perform well at this stage. Therefore, are various "Trump trades" in sync with this?

Donald Trump

Mackintosh stated that the most evident "Trump trade" is DJT, and the effect is indeed very good. The stock showed an upward trend during October when Trump's chances of winning increased, occasionally dropping, and the trend almost completely matched the betting odds, with the price more than doubling before last Tuesday. However, in the past few days, as Trump's chances of winning decreased, the stock also experienced a decline. The recent situation is that it surged again on Monday.

However, Mackintosh believes that a problem DJT faces after the election is, if the bullish impact of Trump's victory is realized, what will it bring to this company? The company's actual operation is the social media platform "True Social", but its performance is meager - with sales of only 0.8369 million USD in the second quarter, yes you read that right: less than 1 million USD, and operational losses have quadrupled to 18.7 million USD.

Mackintosh suspects that a potential scenario after Trump's victory could be a rush of buyers and funds buying DJT. But how can the stock support a market cap as high as 6.1 billion USD, equivalent to over 3000 times the annual sales revenue?

Prison Stocks

Mackintosh mentioned another relatively successful "Trump trade" so far, which is private prison stocks. As Trump's chances of winning increased, the prices of GEO Group and CoreCivic rose accordingly, and recently fell alongside the decline in his chances of winning.

Mackintosh pointed out that these stocks differ from DJT in that their logic is relatively more self-consistent. These prisons are expected to make money from the Trump administration's policies aimed at combating illegal immigration and carrying out large-scale deportations.

US dollar, US bonds

The US dollar has risen, US bond yields have risen, and the price of gold has risen - in recent weeks, these three major asset classes have also been seen by the market as typical "Donald Trump trades". However, Mackintosh has a doubt, are these three really rising because of betting on Trump's entry into the White House?

In fact, even without considering the election, the rise in US bond yields and the US dollar exchange rate can be easily explained, as both usually rise with a strong economy - and recently the performance of the US economy has unexpectedly been strong.

Among non-US currencies, the movement of the Mexican peso is considered to be most closely related to whether Trump wins or not. Mackintosh believes that considering the threats Trump has made in the trade area, this makes sense. However, the peso weakening actually started earlier due to the outgoing Mexican president's reform of the judicial system; this reform made investors worried.

In Mackintosh's view, the "Trump trade" is indeed one of the reasons for the weakening of the peso, but the specific extent of the impact is actually hard to say, after all, factors such as the strengthening of the US dollar and the reform of the Mexican judicial system need to be considered.

Gold, Bitcoin

In Mackintosh's eyes, gold and Bitcoin seem to have many similarities - both are considered "Trump trades", but regardless of whether Trump's odds of winning rise or fall, gold and Bitcoin seem to be climbing in the same direction lately...

Mackintosh points out that due to concerns about global geopolitical tensions and the weakening of the US dollar's reserve currency status, the price of gold has been continuously rising for some time. In terms of gold prices, the impact of Trump's victory on gold may be better than Harris' victory, or may not be as good as Harris' victory, but in any case, when Trump's chances of winning decreased in September, the increase in the price of gold was actually greater than in October.

The same goes for bitcoin. With Harris' increased chances of winning in September, the increase in bitcoin at that time exceeded the increase since October 4. The daily trend of bitcoin is not particularly closely related to the changes in Trump's win rate or DJT stock price - since October 4, on trading days where the direction of bitcoin's daily price movement is the same as DJT stock price, it only slightly exceeds half.

Of course, Mackintosh also mentioned that Trump has promised to make the United States the 'global capital of cryptos'. If he wins, Bitcoin will definitely have a smoother ride in terms of regulations.

Some not very successful 'Donald Trump concept stocks'

Mackintosh also found that some market hyped 'Donald Trump concept stocks' were not very successful during the recent period.

For example, even as Trump's chances of winning increased, healthcare stocks fell by about 3% during this period, contrary to predictions based on his dislike of ObamaCare.

The decline in the renewable energy sector, representing Trump's strong aversion, specifically the cecep solar energy sector, is actually smaller than the energy sector he advocates. Both have recently fallen by nearly 6%, with a very small difference.

European defense stocks should naturally be 'Trump trades', as his isolationist policies may compel European countries to increase their own security expenditures and reduce dependence on U.S. weapon systems. However, European defense stocks have generally declined recently, and when Harris' chances of winning increased in September, European defense stocks rose instead.

America first?

Finally, there is a story about 'America First' - buying US stocks and selling stocks from other regions.

Mackintosh said that this method indeed worked, but it may not be as expected by many traders who bet on Donald Trump.

Since October 4th, the S&P 500 index has actually been declining overall - this trading strategy works mainly because when calculated in US dollars, stocks in other parts of the world have fallen more sharply (USD appreciated during this period). Even when Harris' win rate rose earlier in September, this strategy actually worked - at that time, stocks in other parts of the world were rising, while the S&P 500 index increased even more.

Open Futubull > US Stocks >Investment ThemesDiscover the Donald Trump concept stocks at a glance!

Editor / jayden