Investors bet on Trump victory, Wall Street bank stocks rise overnight
Intelligible Finance learned that major bank stocks in the US rose in after-hours trading as investors expected Trump to win the presidential election. JPMorgan (JPM.US), Citigroup (C.US), Morgan Stanley (MS.US) rose nearly 5%, Goldman (GS.US), Bank of America (BAC.US), and Wells Fargo (WFC.US) rose over 4%.
As traders were watching the result of the White House election, former President Trump currently leads, although the results of several key states have not yet been announced. As the Republicans are expected to control the White House, bank stocks are expected to benefit. Jaret Seiberg, an analyst at TD Cowen, noted that the relaxation of CFPB regulation is particularly beneficial to financial companies.
Seiberg recently wrote in a report to clients: "Trump is a candidate you will ignore what he says and focus on what you expect him to do. That's why he promised to relax financial regulation, because his regulators may revoke most of CFPB's enforcement agenda and reconsider the safety and soundness changes for big banks."
Seiberg said that trading banks can particularly benefit from the possibility of lower capital requirements, the retention of credit card late fees, and help with cryptocurrency regulation. However, he warned that Trump's tariff and immigration plans could bring downside risks, which may lead to inflation.