To The Moon

Hello, Tigers!

Welcome to the fourth installment of Tiger_Academy’s US Election series!

Over the weekend, after being struck on the ear during a rally in Pennsylvania, Trump displayed remarkable resilience, inspiring his supporters and gaining sympathy. Following this incident, Trump's approval ratings have surged.

According to betting data, after the attack, Trump's chances of winning have increased to 60%, significantly higher than the previous 46%.

One thing is becoming clear in the aftermath of the assassination attempt: "Trump trades" are set to ignite the financial markets!

Before the market opened on Monday, Trump-related companies saw a significant rise, with $Trump Media & Technology(DJT)$ already up 21%. This suggests that in the coming week, Trump-related stocks may receive substantial attention and investment.

Next, I will analyze potential beneficiaries of the "Trump trade" from five perspectives: industries, stocks, cryptocurrencies, the dollar, and funds.

Ⅰ. Industries

Wall Street traders generally believe that the attack on Trump will not affect the long-term trends of the stock market but might increase short-term volatility. Given the current boom in AI stocks and the risks posed by rising interest rates and political uncertainty, the market has been grappling with concerns about overvaluation.

David Mazza, CEO of Roundhill Investments, commented, "This attack will exacerbate market volatility."

He predicts that investors might seek refuge in defensive stocks of large-cap companies temporarily. “This also supports stocks that perform well in a steepening yield curve, particularly financials,” he said.

Thus, sectors like banking, healthcare, and traditional energy industries such as oil will benefit from a Trump victory.

Ⅱ. Stocks

1. Beneficiary Stocks

The most direct beneficiary is Trump Media & Technology Group (DJT). This company, named after Trump's initials, was listed on NASDAQ in March 2024. As of February 2024, its social media app, Truth Social, had about 5 million active users, a stark contrast to mainstream U.S. platforms with billions of users.

Despite the lower user count, Trump Media & Technology Group has been active post-listing, with an initial surge of over 50% on its first trading day. Following the attack, DJT is likely to see significant support from Trump supporters, leading to short-term volatility in its stock price.

Another indirect beneficiary is TESLA.

Following the weekend incident, Elon Musk tweeted multiple times in support of Trump, stating, "I fully support President Trump and wish him a speedy recovery. The last time America had such a formidable candidate was Theodore Roosevelt.”

This is the first time Musk has explicitly endorsed a presidential candidate, resulting in a nearly 5% increase in Tesla's pre-market trading on Monday.

Other "Trump concept stocks" include banks and consumer finance companies benefiting from relaxed Wall Street capital flow rules, such as JPMorgan (JPM), Bank of America (BAC), Wells Fargo (WFC), and financial institutions like Goldman Sachs (GS) and Morgan Stanley (MS) benefiting from reduced merger review activities.

Additionally, natural gas producers like Cheniere Energy (LNG), ExxonMobil (XOM), and ConocoPhillips (COP) will benefit from deregulation. Insurance companies providing broader healthcare coverage, such as UnitedHealth (UNH), and pharmaceutical companies like Eli Lilly (LLY) and Merck (MRK) facing reduced "centralized procurement" pressure will also benefit.

Trump's trade protection policies are expected to benefit semiconductor manufacturers, automakers, and steel manufacturers, including Intel (INTC), Texas Instruments (TXN), Applied Materials (AMAT), Ford (F), and General Motors (GM).

2. Affected Stocks

On the flip side, there are "Trump affected stocks," notably Meta.

Meta recently banned Trump's account, and Trump has threatened to imprison Zuckerberg if he wins the presidency. This news has led to consecutive declines in Meta's stock, with a significant drop last Friday.

Ⅲ. Cryptocurrencies

After the assassination attempt, Bitcoin surged past the $60,000 mark for the first time since July 4th, rising 4.9% to $63,000. Ethereum also rose nearly 2% to around $3,183.

Trump has previously expressed support for cryptocurrencies, and the Republican Party's latest platform explicitly states "ending the crackdown on cryptocurrencies," opposing the introduction of a central bank digital currency, and defending the rights of Bitcoin mining and digital asset transactions.

In June, Trump met with Bitcoin miners, later posting on Truth Social that Bitcoin mining might be "our last line of defense against CBDCs," referring to central bank digital currencies. He also stated his desire for all remaining Bitcoin to be "made in the USA."

Geoffrey Kendrick, Head of FX and Digital Asset Research at Standard Chartered, noted that Trump's favorable stance on Bitcoin regulation and mining, compared to Biden, suggests that if Trump's election chances continue to rise, Bitcoin could hit $100,000 by November's election and potentially $200,000 by the end of next year.

Ⅳ. Dollar

Following the assassination attempt, traders reassessed Trump's chances of winning the U.S. presidential election, leading to a rise in the dollar and a drop in U.S. Treasury futures.

Charu Chanana, Market Strategist at Saxo Capital Markets, stated, "As the probability of a Trump 2.0 presidency increases, the dollar may receive a boost, while the Mexican peso and the Chinese yuan might be impacted. The Trump trade could re-enter focus."

It is widely believed that Trump's support for loose fiscal policies and higher tariffs could benefit the dollar while weakening U.S. Treasury bonds.

Ⅴ. Funds

1. U.S. Healthcare Sector Shows Promise

Recent U.S. consumer data shows that in May, prices for healthcare services in the PCE rose by 3.75% over six months, and actual consumption of healthcare services increased by 5.91% over six months, both outpacing overall PCE growth. This suggests that revenues and profits for healthcare service companies could expand further.

Healthcare demand is relatively resilient and less sensitive to economic fluctuations compared to other industries. With increasing economic uncertainty in the U.S. and the impact of the election, Trump’s rising approval could bring defensive assets like healthcare services back into focus.

Related Fund: AllianceBernstein International Health Care Fund (USD: LU0058720904) (SGD: LU0289739699)

2. Tesla’s Stellar Quarterly Delivery Report and Energy Storage Growth

Tesla recently reported a strong Q2 delivery report. Benefiting from Tesla’s incentive policies and the Model 3 Long Range requalifying for the IRA credit in the U.S., vehicle deliveries for the quarter reached 444,000, exceeding the market expectation of 439,000, a 14.8% quarter-over-quarter increase but a 4.8% year-over-year decrease.

Moreover, energy storage product deployments surged to 9.4 GWh, a 132% quarter-over-quarter increase. Given the higher gross margins in this segment compared to automotive, this could help boost Tesla’s overall gross margin.

Combined with Musk’s clear political stance in the upcoming election, Tesla's stock has promising potential.

Related Fund: Allianz Global Artificial Intelligence Fund (USD: LU1548497426) (SGD: LU1846563374)

Investment Path: Open the Tiger International app, click on the search bar, enter the fund code, select “Fund,” and choose “Purchase” or “RSP.”

Leave a comment in the comment section with the assets you are most optimistic about in the U.S. election for a chance to win Tiger Coins!

Disclaimer: This article is purely an analysis of current events. The author merely presents investment data and logic and does not represent any investment advice!