Wall Street is already betting on stocks that would benefit if former President Donald Trump were to return to the White House.
Trump’s social media platform company (DJT) isn’t the only stock to rise after an assassination attempt on the Republican nominee and a damaging debate for Democratic President Joe Biden. Political analysts say these factors have increased the odds of a Republican victory.
Trump has dropped key hints about which sectors he would support if elected in November.
“Drill baby drill, and close our borders,” Trump said Thursday night at the Republican convention.
Private prisons
The number of private prison companies has exploded in the past month amid Trump’s tough stance on illegal immigration and tightened border security.
Shares of GEO Group (GEO), a Boca Raton, Florida-based company that invests in private prisons, have risen more than 28% in the past month.
CoreCivic (CXW), formerly Corrections Corporation of America, owns and operates private prisons and detention centers in the U.S. The stock has risen more than 27% in the past month.
Energy
Trump 2.0 would likely mean fewer restrictions on permitting and drilling.
“Republicans have a plan to bring prices down and bring them down very, very quickly by dramatically reducing energy costs,” Trump told the convention.
It’s worth noting that geopolitical risks and supply and demand can play a bigger role in how energy stocks perform. Yahoo Finance statistics wizard Jared Blikre points out that during the Trump administration, the S&P 500 Energy Select ETF (XLE) fell 56% as oil demand fell during the pandemic.
In contrast, XLE has surged 218% since the start of Biden’s presidency, with major players posting record profits as Russia’s invasion of Ukraine sent crude oil futures prices soaring.
Operating costs, particularly around permitting, could fall under a Trump presidency, making oil companies more profitable, said Matt Stephani, president of Cavanal Hill Investment Management. However, the strategist does not believe that will translate into more supply.
“I do not believe [oil companies] are being incentivized to increase production,” Stephani said. “The industry has consolidated and is focusing more on returns than growth.”
The strategist says a Trump presidency “is likely to be positive for energy stock valuations, as investors push up their ultimate value. That is, oil doesn’t become obsolete as quickly as some had feared.”
Oil and gas producer ExxonMobil (XOM) and natural gas supplier EQT Corporation (EQT) are among the stocks expected to benefit from the Trump campaign’s move to lift a freeze on new liquefied natural gas export permits, according to analysts at Evercore ISI.
Coal producer Peabody Energy (BTU) and steelmaker Nucor (NUE) have risen on prospects of increased U.S. production. Both have gained about 7% since the presidential debate in late June.
Electric vehicles
During the Republican Party convention, Trump indicated that he plans to scale back Biden’s clean energy initiatives, particularly electric vehicles.
“I will end the electric vehicle mandate on day one, saving the American auto industry from complete destruction,” Trump said Thursday.
While the former president appeared tough on electric vehicles, some analysts say Tesla (TSLA) could be an exception.
Trump 2.0 could “potentially be beneficial given Musk’s close relationship with Trump,” Sarah Bianchi, policy analyst at Evercore ISI, said in a recent note.
Tesla CEO Dan Ives of Wedbush believes “Tesla has unmatched scale and reach” in the EV industry, even in a non-subsidy environment.
The analyst also said higher Chinese tariffs “will continue to deter lower-cost Chinese electric car suppliers” from flooding the U.S. market in the coming years.
Bitcoin and Cryptocurrency Stocks
Bitcoin (BTC-US) has risen around 10% since the July 13 assassination attempt, hovering around $65,000 per token.
Trump’s support for the cryptocurrency marks a shift from his position when he was president. In May, Trump’s campaign said it would begin accepting donations via bitcoin.
The former president is expected to speak at the Bitcoin conference in Nashville, Tennessee on July 27, marking a watershed moment for the cryptocurrency industry.
Crypto optimists have also pointed out that Trump’s vice presidential nominee, JD Vance, is a Bitcoiner, based on the Ohio senator’s financial disclosure from last year.
Over the past 10 days, crypto-related stocks Riot Platforms (RIOT), Microstrategy (MSTR), and Coinbase (COIN) have risen by 35%, 21%, and 16% respectively.
Finance, M&A Equities
According to Evercore ISI’s Bianchi, regional banks in particular will benefit from a Trump victory, as regulations on “bank capital and liquidity are expected to be less stringent”.
Investors also expect changes at the Federal Trade Commission and the Justice Department’s antitrust division under a Republican presidency.
“You get a much more hospitable climate for mergers and acquisitions,” Isaac Boltansky, director of policy research at BTIG, told Yahoo Finance last week.
Shares of Lazard (LAZ), Moelis (MC) and Evercore (EVR), financial firms that provide merger and acquisition services, have all risen double digits since the June 27 presidential debate.
A Trump administration could also try to drop the Justice Department’s antitrust lawsuit against Live Nation (LYV). Shares of the entertainment company have risen more than 5% since late June.
Freddie Mac and Fannie Mae
Government-sponsored mortgage companies Fannie Mae (FNM.SG) and Freddie Mac (FHL.SG) have long been Trump’s targets for privatization. The two companies are behind about half of all mortgages in the U.S.
“There’s going to be a pronounced push to get Fannie and Freddie, the mortgage boards, out of conservatorship. That’s something that not only Donald Trump has focused on, but really the entire Republican Party,” BTIG’s Boltansky recently told Yahoo Finance in a live interview.
Year to date, Freddie Mac is up more than 60%. Shares are up more than 6% in the past month. Fannie Mae shares are up 34% year to date and more than 7% in the past month.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X on @ines_ferre.