Story Stocks^®

With Trump's win last night, our team of analysts brainstormed on sectors where his administration may be a positive and some areas where it could be a negative. This is not an exhaustive list, but some areas of interest:

• POSITIVE: Bank stocks should benefit from less regulatory oversight (BAC, C, CMA, JPM, PNC, WFC) and possibly higher rates on higher inflation/deficits; investment banks should benefit as well, particularly those with more exposure to M&A advisory (GS, MS). Regional Banks should benefit from the prospect of less regulation/fewer capital restrictions.
• Bitcoin and crypto are expected to do well as Trump has embraced the industry. Beneficiaries include COIN, HOOD, MSTR, BITO.
• Coal stocks are likely to benefit as Trump has not been a fan of clean energy. Fewer restrictions on coal production will help. Higher coal production would be good for rail stocks.
• Steel stocks are rallying today (X, CMC, NUE, STLD, MT, WOR) on the Trump victory. Not only has he promised to be more protectionist in terms of tariffs to protect American companies from foreign competition, but steel companies also get a second benefit in that coal prices may come down as Trump lessens regulation in terms of production (increases supply). Steel producers are a big consumer of coal to make steel.
• Electric utilities are another big consumer of coal. If supply increases, that should lower costs for them. Nuclear stocks would be another beneficiary.
• Defense stocks are likely to benefit from increased spending (AVAV, BA, GD, LMT, NOC, RTX).
• Biotech/pharma stocks should benefit as Trump will likely reduce scrutiny over drug prices.
• Consumer finance has been in crosshairs of regulators over fees: COF, DFS, SYF. Trump may alleviate some of that pressure.
• Private prison stocks should see a benefit (CXW +30%, GEO +29% are surging today) on the likelihood of border detention centers and prisons.
• Tesla (TSLA) is up nicely given Elon Musk's close relationship with Trump and what that might mean for his company.
• Trump Media (DJT) is up big today, not surprisingly. However, this is a volatile stock and caution is required.
• Possibly FNMA/FMCC as two of his top supporters own significant stakes and have been advocating for a plan to revive them.
• NEGATIVE:
• Solar stocks (TAN, FSLR, SEDG, ENPH, CSIQ) and other forms of clean energy are trading lower as Trump favors traditional energy sources and is not a big proponent of clean energy.
• Hospitals (CYH, THC, UHS) are trading lower on concerns that Trump with a GOP Congress could curtail certain aspects of the Affordable Care Act.
• Integrated oil stocks are higher as "Drill, baby, drill!" was a key mantra. However, that would ramp up supply and possibly pressure oil prices. However, it would be a benefit for oil drilling/oil service industries.
• Commodities trading lower on likelihood of a strong dollar, including gold (GLD -3%), also copper lower, possibly on China tariffs (COPX -6%).