From defense stocks to cryptocurrencies: the investments you could benefit from when Donald returns to the White House

Markets hate uncertainty, the old saying goes, so there was some relief among investors that American voters had made a clear decision.

Days or weeks of political and legal wrangling over the outcome of the US election would likely have proven enormously turbulent in financial markets and destabilizing for the global economy and geopolitics.

So while Donald Trump’s return to the White House as president will stir strong feelings in many, investors can begin planning for the coming years with at least some clarity. Chaos is rarely good for investors.

Many Britons are direct investors in the United States, and the lucky ones own some shares in high-tech giants, such as Apple, Microsoft and Amazon, which have soared in recent years.

Anyone with a private sector pension will have some assets in the United States.

The US market accounts for 60 percent of global stocks and every balanced portfolio will own some stocks there. Beyond that, the dollar anchors global trade and investment.

US Treasury securities (debt issued by the US government) are the primary investment held as reserves in the world’s central banks.

And, of course, the United States is not only the largest economy in the world, far ahead of China, but it is increasing its lead over Europe.

So what happens now?

The verdict on the markets was mixed. U.S. stock markets soared along with the dollar and bitcoin, but European markets fell as did U.S. government bonds, pushing up yields or borrowing costs.

These are the so-called ‘Trump changes’ in action.

Before Election Day, the consensus was that a Trump victory would be better for US stocks and worse for bonds, while a Kamala Harris presidency would be the other way around.

The argument was that Republicans will be more pro-business than Democrats and that the tax cuts they have promised will boost, at least in the short term, economic growth and corporate profits.

The downside is likely to be higher inflation, which will lead to higher interest rates and more public debt.

And there are implications for the global economy – including Britain – including the threat of a global trade war if Trump carries out his threat to raise tariffs on imports to the United States. These fears caused early gains for European benchmark indices, including the FTSE 100 stock index, to evaporate.

What should you do?

History suggests that you should put aside political allegiances and continue investing in the stock market, no matter who is in the White House.

And analysts believe there are many options – as well as risks – for those who wish to profit from a Trump victory.

Here are ten investments that experts believe are worth considering, although each carries risk.

Exxon Mobile

Trump has long been seen as a friend of Big Oil and any moves to favor fossil fuels and deregulate the industry should benefit

Exxon Mobil, says Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown.

“Trump’s victory is likely to bring regulatory relief for Exxon, including relaxed environmental restrictions and lower corporate taxes, which could improve profitability and support greater domestic production,” he says.

Morgan Chase

Streeter also believes the financial sector will benefit from Trump’s return to the Oval Office, with JP Morgan Chase, America’s largest bank, being his pick of the bunch.

“It is expected to continue to focus on deregulation and tax reductions,” he explains.

“A lighter regulatory touch could reduce compliance costs and stimulate capital markets through favorable policies.”

BAE Systems

European defense stocks rose yesterday on expectations of greater military spending on this side of the Atlantic.

Trump has threatened to reduce US military support to Europe and force NATO members to spend 2 percent or more of their national output on defense, increasing pressure on the United Kingdom, Germany, France and others to do so. further.

BAE Systems It rose 4.9 per cent, or 63 pence, to 1,343 pence, and 11 of the 20 analysts who follow rate the stock a “buy”, while only one says sell.

Rolls-Royce is also liked by analysts, with 13 saying “buy” and only one saying “sell”, even with the stock at a record high after rising six-fold since “Turbo” Tufan Erginbilgic took over as chief executive. early last year.

Ashtead Group

The biggest rise in the FTSE 100 yesterday was Ashtead Groupwhich rents equipment from barriers and fences to excavators and forklifts under the Sunbelt Rentals brand.

Analysts at brokerage Peel Hunt say 91 percent of its profits will come from the United States in 2025, where it will benefit from “proposed corporate tax cuts that could stimulate slightly higher levels of private sector investment.”

Dan Coatsworth, an analyst at financial platform AJ Bell, agrees, saying: “Their long-term prospects should improve under Trump.”

Ferrexpo

Also on the rise in London was Ferrexpowhich operates three iron ore mines and an iron ore pellet production plant in Ukraine and will benefit if Trump can help end the war with Russia.

Neil Wilson, chief market analyst at financial planner Finalto, says the stock’s jump – up 27.3 per cent, or 17p, to 79.2p – is a “peace move in Ukraine”.

“With its mine and processing plant in Ukraine, Ferrexpo currently holds the potential for a deal in Ukraine,” Peel Hunt analysts add.

Trump media technology

Wilson also describes Trump Media Technology, the parent company of the president-elect’s social media platform, Truth Social, as “something to watch for obvious reasons.”

The stock rose 6 percent last night, although this paled in comparison to initial gains of more than 30 percent, underscoring its volatility.

Trump created Truth Social in 2021 after he was removed from Twitter, and the stock has closely tracked his electoral prospects.

There is also speculation that X, as Twitter was renamed when it was bought by Trump ally Elon Musk, may be planning to buy the company.

tesla

Speaking of Musk, Daniel Ives of Wedbush Securities believes Trump’s return could boost Tesla’s stock from around $250 before the outcome to more than $300, valuing it at $1 trillion.

“The most positive thing about a Trump victory would be for Tesla and Musk,” he says.

He also notes that while ending tax breaks for electric vehicles would be bad for the industry as a whole, it could be “very positive” for Tesla due to its dominant position.

However, there are concerns that Musk (pictured left on the campaign trail) will not spend enough time running Tesla due to distractions including his support for Trump and other business interests, including Space X.

bitcoin

Bitcoin rose to an all-time high above $75,000 as it became clear that Trump was on track to win the presidency.

Cryptocurrency experts and enthusiasts believe it will usher in softer regulation for the industry, with analysts at Standard Chartered saying it could hit $200,000 next year.

Skeptics, however, warn that bitcoin has no intrinsic value and that anyone who invests should be prepared to lose everything.

Artemis US smaller because

The ‘American First’ boost is likely to benefit small- and mid-cap stocks in the US, which Nick Wood, head of fund research at wealth manager Quilter Cheviot, said “are currently undervalued compared to mega-capitalizations.”

He argues that Trump’s focus on domestic companies makes the Artemis US Smaller Companies fund attractive, especially given its “strong long-term track record due to excellent stock selection.”

British American Tobacco

A change in regulation of nicotine companies could also present opportunities, says Chris Beckett, head of equity research at Quilter Cheviot.

And a drastic measure by the United States against Chinese vaping companies would be beneficial British American Tobaccowhich is the market leader in this area through its Vuse brand.

“Restricting Chinese imports or holding them to the same standards would be very positive for BAT,” says Beckett.