2024-07-28 00:13:03
The events that have occurred in the last month have increased Donald Trump’s chances of winning the United States elections that will take place in November. The possibility of the magnate returning to the White House has boosted the shares of arms manufacturers and private prison operators. Bitcoin has also benefitted.
His victory in the electoral debate against President Joe Biden, the assassination attempt he suffered, and the withdrawal of the Democratic candidate from the presidential race in favor of Kamala Harris bring Trump closer to a second term.
Managers at Axa IM believe that “the probability of Trump regaining office is the most likely,” although they acknowledge that “Harris’s entry makes this less certain.”
From bitcoin to regional banks
One of the assets most benefited by a hypothetical victory of the Republican candidate is bitcoin. The world’s leading cryptocurrency has appreciated by 13.2% since July 15, when the attack on Trump took place.
“The Republican presidential candidate has been widely seen as pro-crypto in this campaign despite his past skepticism, even accepting donations in cryptocurrencies like bitcoin and ethereum, a novelty for a major political party in the US,” emphasize experts from eToro.
This Saturday, Trump participated in the Bitcoin 2024 Conference held in Nashville, Tennessee, as part of the Republican strategy to attract cryptocurrency investors ahead of the elections. The party has promised lighter regulations for cryptocurrencies, while the magnate recently criticized Democrats’ attempts to regulate the sector.
The former president indicated that he would like to see an expansion of bitcoin mining by American companies, although in 2021 he labeled this digital asset a “scam.”
Trump’s change of opinion has led to a rise in bitcoin – which has surpassed $69,000 for the first time since mid-June – and also in several publicly traded companies related to the crypto universe.
Microstrategy, a software company with a significant bitcoin portfolio, has surged by 25.5% in the last ten sessions. During the same period, the cryptocurrency exchange platform Coinbase has risen by 11.4%, while the cryptocurrency miners Marathon Digital and Riot Platforms have appreciated by 3.9% and 14.3%, respectively.
Other companies that are likely to benefit from Trump’s potential victory include American arms manufacturers.
Shares of Smith & Wesson, the largest small arms manufacturer in the country, have appreciated nearly 15% since the attack on the former president. The stock of Sturm Ruger, which produces rifles and automatic pistols, revolvers, and silencers, has risen 9.2%.
A Smith & Wesson booth at a police conference held in Chicago, Illinois.
Reuters
The same goes for the private prison operator CoreCivic. The company, which manages more than 93 correctional and detention centers across the United States, has increased by 9.6% in the last two weeks. GEO Group, another of the largest private prison operators in the country, has lost 1.6% of its value.
Nevertheless, analysts from Wedbush Securities believe that both GEO Group and CoreCivic could benefit from a second Trump term, as the former president would seek to strengthen resources related to border security and immigration detention facilities.
On the other hand, Rumble, the Canadian-based video platform seen by American conservatives as a refuge against censorship and woke culture, has risen by 13.6%.
Small regional banks and energy companies in the US have also seen their stock prices rise, driven by Trump’s increasing popularity. The advance of the former is measured by a 6% increase in the KBW index, while the latter has risen by around 1.8%.
Analysts believe that regional entities could benefit from Trump’s victory, as it would lead to less regulation and pro-growth policies. Additionally, they point out that a Trump Administration would be more inclined toward bank mergers and acquisitions.
At the same time, they emphasize that oil, gas, and electric companies tend to be favored by a Republican government.
Trump Media
Trump Media & Technology Group, the parent company of Truth Social, the platform promoted by the magnate, surged more than 61% during the session on July 15. However, ten trading sessions later, the balance has reduced to below 2%.
The company began trading on Nasdaq under the symbol DJT on March 26, after completing its merger with the SPAC -special purpose acquisition company- Digital World Acquisition. Its initial price: $70 per share.
Stock photo of a mobile phone showing Donald Trump’s social network, Truth Social.
Efe
In the first sessions following its stock market debut, it climbed to $80. However, it now trades around $31 per share. For the year as a whole, the appreciation is close to 79.7%.
Thus, since joining Digital World Acquisition, it has accumulated a drop of 37%.
Analyzing Future Trends Amid Trump’s Resurgence
The last month has significantly increased Donald Trump’s chances of reclaiming the U.S. presidency in the upcoming November elections. With his recent electoral debate victory against President Joe Biden and other pivotal events, such as an assassination attempt and the withdrawal of a competing Democratic candidate, Trump is closer than ever to a potential second term.
Market analysts from Axa IM believe that “the probability of Trump regaining the office is most likely,” although they note that Kamala Harris’s entry complicates this certainty.
Bitcoin and Cryptocurrency Boom
One key player in the financial landscape benefiting from Trump’s potential victory is bitcoin, which has appreciated 13.2% since mid-July. Once considered a “scam” by the former president, Trump has recently embraced cryptocurrency, accepting donations in bitcoin and ethereum as part of his campaign strategy, signaling a shift towards a more pro-crypto stance.
His appearance at the Bitcoin 2024 Conference in Nashville aligns with the Republican strategy to attract cryptocurrency investors, promising looser regulations while criticizing Democratic efforts to impose strict controls on the sector.
Impacts on Firearm and Private Prison Stocks
Trump’s potential resurgence also positively influences stocks in the firearm manufacturing sector. Companies like Smith & Wesson and Sturm Ruger have seen notable increases in their stock prices since Trump’s assassination attempt, with gains of nearly 15% and 9.2%, respectively.
Additionally, private prison operators such as CoreCivic have increased by 9.6%, driven by expectations of reinforced border security policies during a potential second Trump administration. Analysts suggest that both CoreCivic and GEO Group might benefit from an uptick in government contracts related to security and immigration enforcement.
Regional Banks and Energy Stocks on the Rise
Trump’s growing popularity appears to be lifting regional banks and energy companies as well. The KBW bank index shows a 6% rise among smaller banks, fueled by anticipation of regulatory rollbacks and pro-growth policies under Trump. Similarly, energy stocks generally fare well under Republican leadership, reflecting a likely boost in investments.
Trump Media’s Stock Fluctuations
Meanwhile, the Trump Media & Technology Group, which includes the social media platform Truth Social, saw its stock surge over 61% shortly after its initial public offering but has since stabilized below 2%. This volatility signals a reactive market environment, largely hinging on Trump’s political fortunes.
As these developments unfold, investors and analysts will be closely monitoring the implications of Trump’s potential return to power, signaling a future shaped significantly by his policies and the markets’ reaction to them.
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