Stocks that make up the Trump trade

Wall Street is already betting on stocks that stand to benefit if former President Donald Trump is re-elected to the White House.

Trump’s social media platform company (DJT) isn’t the only stock to gain value following the attempted assassination of the Republican nominee and a negative debate for Democratic President Joe Biden, both of which political analysts say boost Republicans’ chances of victory.

Trump has given important clues about which sectors he will prioritize if elected in November.

“Drill our baby, drill our baby and close our borders,” Trump said at the Republican Party convention on Thursday night.

Private prisons

Investments by private prison companies have increased in the past month due to Trump’s tough stance on illegal immigration and increased border patrols.

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. Its stock has gained more than 27% in the past month.

Energy

Trump 2.0 will likely mean fewer restrictions on permits and drilling.

“The Republicans have a plan to bring down energy costs very, very quickly,” Trump said in his speech to Congress.

It’s worth noting that geopolitical risks and supply-demand factors may play a larger role in the performance of energy stocks. Yahoo Finance’s statistics wizard Jared Blikre notes that the S&P 500 Energy Select ETF (XLE) fell 56% during the Trump administration as oil demand plummeted during the pandemic.

Elsewhere, XLE has surged 218% since the start of Biden’s presidency, with major companies reporting record profits as Russia’s invasion of Ukraine sent crude futures soaring.

Matt Stephani, president of Cavanal Hill Investment Management, said a Trump presidency could lower corporate costs, particularly permitting costs, and make oil companies more profitable. But the strategist doesn’t think that will lead to more supply.

“I don’t believe [oil companies] “They are incentivized to increase production,” Stephani said. “The industry has consolidated and focused on returns rather than growth.”

The strategist says a Trump presidency “will likely be positive for energy-related stock valuations because investors are bullish on the bottom line, meaning oil won’t go out of fashion as quickly as some people fear.”

Stocks expected to benefit from the Trump campaign’s intent to lift a pause on new licenses for liquefied natural gas exports include oil and gas producer ExxonMobil (XOM) and natural gas provider EQT Corporation (EQT). These stocks are among those expected to benefit from the Trump campaign’s intent to lift a pause on new licenses for liquefied natural gas exports, Evercore ISI analysts said.

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Coal producer Peabody Energy (BTU) and steelmaker Nucor (NUE) rose on expectations of higher U.S. production. Both are up about 7% since the presidential debate in late June.

Electric vehicles

At the Republican convention, Trump expressed his intention to scale back Biden’s clean energy initiatives, particularly electric vehicles.

“I will end the electric vehicle mandate on day one, saving the United States auto industry from total destruction,” Trump said on Thursday.

Republican presidential candidate former President Donald Trump arrives at the 2024 Republican National Convention at Fiserv Forum in Milwaukee on Thursday, July 18, 2024. (AP Photo/Carolyn Kaster) (ASSOCIATED PRESS)

While the former president has taken a tough stance 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,” Evercore ISI policy analyst Sarah Bianchi said in a recent note.

Tesla backer Dan Ives of Wedbush believes that even in an unsubsidized environment, “Tesla has unmatched scale and scope in the EV sector.”

The analyst also said that higher tariffs imposed on China “will continue to deter cheaper Chinese electric vehicle players from entering the U.S. market in the coming years.”

Bitcoin and cryptocurrency stocks

Bitcoin (BTC-US) is hovering around $65,000 per token, up nearly 10% since the July 13 assassination attempt.

Trump’s support for cryptocurrency is a departure from his position when he was president. His campaign said in May that it would begin accepting donations via bitcoin.

The former president is expected to speak at the Bitcoin Conference on July 27, marking a landmark moment for the cryptocurrency industry.

Cryptocurrency bulls also point out that Trump’s vice presidential candidate, JD Vance, is a Bitcoin user, judging by the Ohio senator’s financial disclosures from last year.

In the last 10 days, cryptocurrency-related stocks Riot Platforms (RIOT), Microstrategy (MSTR), and Coinbase (COIN) have gained 35%, 21%, and 16% respectively.

Finance, M&A stocks

Regional banks in particular could benefit from a Trump victory, given the prospect of “less stringent bank capital and liquidity regulation,” according to Evercore ISI’s Bianchi.

Investors also expect changes at the Federal Trade Commission and the Justice Department’s antitrust division under a Republican presidency.

“You’re going to have a much more favorable climate for mergers and acquisitions,” Isaac Boltansky, BTIG’s director of policy research, told Yahoo Finance earlier this week.

Shares of merger and acquisition financial firms Lazard (LAZ), Moelis (MC) and Evercore (EVR) have all gained double-digit percentages since the June 27 presidential debate.

The Trump administration may also try to drop the DOJ antitrust case against Live Nation (LYV). Shares of the entertainment company have risen more than 5% since the end of June.

Freddie Mac and Fannie Mae

Government-backed mortgage companies Fannie Mae (FNM.SG) and Freddie Mac (FHL.SG) have long been Trump targets for privatization. The two companies back about half of all mortgages in the U.S.

“There’s going to be a significant push to deconservatize the mortgage signals from Fannie and Freddie. That’s something that not only Donald Trump, but really the entire Republican party is focused on,” BTIG’s Boltansky told Yahoo Finance in a recent live interview.

Freddie Mac is up more than 60% year to date. Shares are up more than 6% last month. Fannie Mae shares are up 34% year to date and more than 7% last month.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her at X @ines_ferre.