The U.S 2024 president election results are in, and Donald Trump has secured the presidency. With election uncertainty lifted, U.S. stocks soared as the Dow Jones Industrial Average jumped 1,500 points, or 3.57%,as investors are betting that Trump's policies will benefit Dow components.
The Small Cap Russell 2000 surged nearly 6%, with markets anticipating tax cuts and deregulation that favor small businesses.
Big Winners:
Elon Musk's Support Pays Off: Tesla shares skyrocketed by 15%, adding another $15 billion to the world's richest man's fortune.
Bank Stocks:
Shares of Morgan Stanley, Goldman Sachs, Citibank, and Bank of America climbed higher. The market expects Trump's expansionary fiscal policies to lead the Federal Reserve to maintain high interest rates, boosting banks' net interest income. Relaxed financial regulations and reduced capital reserves also support increased banking activities.
Private equity giants like Apollo Global and KKR saw significant gains, anticipating looser merger and acquisition regulations.
Traditional Energy Stocks: ExxonMobil, Chevron, and EQT saw substantial gains, buoyed by Trump's support for traditional energy, encapsulated in his campaign slogan, Drill, baby, drill.
Cryptocurrency Stocks: Trump is widely perceived as crypto-friendly, pushing Bitcoin to new highs and lifting cryptocurrency stocks like Coinbase.
Prison Stocks: With Trump advocating for a hardline stance on illegal immigration and crime, the expectation is that government outsourcing for incarceration will rise. Private prison stocks, like Geo Group and CoreCivic, surged, historically aligning with Republican policies.
Top Losers:
Renewable Energy Stocks: Trump's favorable stance toward traditional energy poses a threat to the clean energy sector, potentially rolling back Biden's subsidies for clean energy. Solar and wind energy stocks took a significant hit.
Real Estate: Real estate developers are highly sensitive to interest rate changes. The new administration's support for fiscal expansion is likely to keep the 10-year Treasury yield high, raising borrowing costs and mortgage rates, which pressures the real estate industry.
Chinese Stocks: Trump's threat to impose a 60% tariff on all Chinese goods could severely impact China's export sector if enacted, leading to a widespread downturn in Chinese stocks.