Saturday’s close-call assassination attempt of former President Donald Trump had a rallying effect on the stock market. On Tuesday, markets closed on new all-time highs as the S&P 500 (SPX) gained 0.6% and DoW jumped by 1.9%.
This once again shows that capital dislikes uncertainty. With the lasting iconography cemented from the Pennsylvania Trump rally, it is now more likely that Donald Trump will gain his second presidency. All the more, after much doubt had risen across media channels about President Biden’s mental faculties,
Furthermore, with three interest rate cuts on the table by the year’s end, per fed fund futures, more space is set to open for cheaper capital. In the likely scenario that Donald Trump wins the US presidency on November 5th, which stocks will most likely gain a boost?
Considering that tax cuts and deregulation efforts marked Trump’s presidency via rollbacks and repeals, these are the top candidates.
Tesla
Elon Musk, owner of the world’s most influential social media platform made a bold move after the assassination attempt, having fully endorsed (former) President Trump.
This is not surprising as the Biden admin opened up a full-spectrum attack against Musk, ranging from the Federal Trade Commission, the Securities and Exchange Commissions, Department of Justice and the National Labor Relations Board to the Fish and Wildlife Service.
Backing his words, Elon Musk committed $45 million to Trump’s super PAC. The billionaire entrepreneur further hinted that EV subsidies do not help Tesla Inc (NASDAQ:TSLA) as much as people believe. According to him, they only help Tesla competitors, which is why he proposed that the next administration should “remove subsidies from all industries!”
As President, Donald Trump has a mixed record on subsidies. While drastically expanding subsidies to farmers, from $4 billion to over $20 billion, he also effectively boosted oil, gas, and coal companies by cutting funding for renewable energy and environmental protection. The latter indicates Trump’s view of the “net-zero” narrative fitting into Musk’s recent proposal.
Most importantly, Trump is known to favor domestic industry and manufacturing base while imposing tariffs on China’s imports. This aligns with recent EU moves, which would significantly help Tesla’s bottom line.
Over the last three months, TSLA stock is up nearly 60%. At their present price, TSLA shares are still under the 52-week high of $280.93 per share. The stock mood will largely depend on the delayed robotaxi reveal, shifted from August to October.
CoreCivic
Operating private correctional and detention facilities, CoreCivic Inc (NYSE:CXW) had been a real estate investment trust (REIT) until January 2021. Given that Trump narrowly avoided a bullet when going off script about immigrant crime stats, it is safe to say that the second Trump presidency would ramp up CoreCivic’s bottom line.
In May’s Q1 2024 earnings, the company reported 75.2% occupancy, the highest level since Q1 2020. This generated 9% more revenue from the year-ago quarter. The company refinanced its existing debt by issuing $500 million senior unsecured notes, while also renewing eight contracts that were up for renewal during the quarter.
During 2023, CoreCivic renewed all 34 contracts, suggesting the company’s high brand loyalty among federal, state and local governments. Over the last month, CXW stock is up 32%. Presently priced at $15.03, it is close to its 52-week high of $16.54. With lowered interest rates ahead, and Trump’s historic plan for mass deportation of illegals who got in during the Biden admin, CXW could visit its previous all-time high of $37.15 in 1997.
Deere & Company
John Deere, a 200-year-old agriculture and construction company, recently made news by backtracking its so-called “woke” DEI policies. These include company-mandated training and participation or support of “external social or cultural awareness parades, festivals, or events.”
Considering that Deere & Company (NYSE:DE) customers are on the opposite spectrum of such activism, this is a major bullish move. Likewise, the company could find itself in the same boat as Tesla, as a second Donald Trump presidency is likely to protect the domestic agricultural sector alongside blue-collar workers.
In the meantime, the company began its cost-cutting programs in March, planning to lay off around 1,500 workers in Iowa and Illinois across three factories. This is not surprising considering Deere’s cyclical nature, depending on the ebbs and flows of farm sales.
In May’s quarterly earnings, Deere reported a 15.3% decrease in net sales, confirming this dynamic. However, with the looming 2nd Trump presidency and his history of widely increased farm subsidies, the downturn may be a solid entry exposure into DE stock.
Presently priced at $387.11, DE shares are nearly 15% below their 52-week high point of $450 per share, and just under their 52-week average of $388.38. According to Nasdaq forecasting data, DE stock is strongly recommended, with an average price target of $413.33 twelve months ahead.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.