If Donald Trump emerges victorious in the upcoming election and assumes the presidency in January, it could have notable repercussions on U.S. businesses and the economy, potentially affecting the stock portfolios of American individuals. Investors might find it prudent to evaluate their current investments and consider which sectors may benefit or suffer under a renewed Trump administration.
Historically, Trump has been perceived as favorable for banks and fossil fuel companies, while potentially detrimental to the renewable energy sector. Analysts have indicated that the situation might be more complex than it appears. Potential impacts of a Trump presidency could range from tariffs to changes in tax policy.
Several stocks may experience significant changes if Trump wins on November 5.
Potential Beneficiaries:
The financial sector might gain from a Trump presidency, as suggested by Jay Hatfield, CEO of Infrastructure Capital Advisors, who thinks financial institutions such as JPMorgan Chase could benefit from potentially reduced regulations.
Private equity firms and asset managers, currently enduring a challenging period for deal-making, could also see benefits. A company like KKR might profit from an increase in IPOs and mergers and acquisitions.
The cryptocurrency industry might also anticipate a more favorable regulatory environment under Trump, potentially benefiting firms like Coinbase and MicroStrategy, which is a major corporate holder of Bitcoin.
Furthermore, the energy sector is considered a likely beneficiary, given Trump’s pro-drilling stance. However, Sam Stovall, chief investment strategist for CFRA Research, points out that a substantial increase in oil production could lower oil prices, negatively impacting upstream companies like drillers and exploration firms but favoring downstream entities such as refiners, including Valero Energy and Kinder Morgan.
Potential Decline:
Not all sectors might benefit. Prominent drilling companies like HF Sinclair and Helmerich and Payne may not experience gains from a Trump-related energy boom. Jay Hatfield remains skeptical about the negative outlook for renewables under Trump, noting the challenges Republicans may face in repealing or modifying the Inflation Reduction Act.
Tariffs could pose significant challenges for retailers, with Trump’s proposals for at least a 10% tax on U.S. imports and a 60% tariff on Chinese goods potentially raising consumer prices. Importers like Walmart and Dollar General could be particularly affected.
Additionally, potential retaliatory tariffs could stifle global trade, adversely impacting logistics companies such as DHL.
Consequently, a Trump victory might result in a decline in stocks for companies in these sectors.
