The stock market surged to record highs following Donald Trump’s comprehensive election victory on November 5. Investors appear confident that the President Elect’s pledges to cut regulation and lower taxes will be a boon for economic growth and corporate profits. American companies are also expected to benefit from tariffs on imports into the USA, which could encourage, if not coerce, a large amount of onshoring.

While stocks associated with the so-called Trump Trade have surged, others have faltered, as concern mounts over the future of renewable energy technology in the second Trump term. So, while the overall stock market is on the way up, there could be winners and losers on the road to come.

Tesla stock surges on Trump’s win

Tesla stock rallied more than 39 per cent, more than $300 billion, in the days following the US election. The CEO of the EV maker, Elon Musk, had played a pivotal role in Donald Trump’s successful campaign, donating millions through his own PAC, and even joining the campaign on the ground for a sustained period in the key battleground state of Pennsylvania.

Many investors expect Musk’s company to benefit from tariffs, which could effectively block Chinese competitor BYD from the US market entirely. In addition, Tesla’s autonomous driving technology, which continues to undergo regulatory oversight, could benefit from Trump’s deregulation agenda. While Tesla stock has now entered a corrective phase, losing 5 per cent on Thursday, the prospects for the company over the coming years look strong.

President-Elect Trump has promised to scrap his predecessors’ EV mandate and the EV credit, which is designed to help consumers transition from petrol and diesel engines. Although it might seem counterintuitive, some analysts think these policies could actually benefit Tesla. As Forbes reported:

“This is not a surprise in any way as we fully expected Trump will rip away the EV tax credit once he gets into the Oval Office in January,” Wedbush analyst Dan Ives wrote in a Thursday note to clients.

Ives reiterated the tax credit cancellation is a “net bullish move for Tesla and Musk over time” as it will hurt the EV market dominator Tesla less than smaller players.

Those bullish on Tesla will also point out that Musk appears to have the ear of the President-Elect, who has had the billionaire join him on calls to international leaders and appointed him to lead the newly created Department of Government Efficiency. This relationship could prove beneficial not just for Tesla, but across the board for Musk’s numerous companies.

Speaking with Reuters, sources close to several of Elon Musk’s companies said the CEO had waded into the political fray as part of a “wider strategy to insulate his companies from regulation or enforcement and boost their government support.”

Trump’s win takes Bitcoin to record highs

The cryptocurrency Bitcoin was another beneficiary of the US election results, briefly surging through the $90,000 mark on Tuesday. The Trump campaign had made overtures toward the crypto community, including a pledge to create a national stockpile of cryptocurrency and outlining the broader goal of making the US a world leader in the sector, among other promises.

If Trump pulls through on his many commitments, we can expect to see further upside not just for Bitcoin, but for companies associated with crypto such as exchanges. Some of that benefit is already being seen, with shares of the crypto exchange Coinbase leaping almost 25 per cent on the day after the election.

As of November 16, Bitcoin continued to trade over $90,000, with some analysts forecasting the cryptocurrency could surpass $100,000 before the end of the year. In a November 11 note, Josh Gilbert, who is a market analyst at eToro wrote:

“Though Bitcoin is sitting at record highs, it really feels like this rally could just be getting started. This bull market has a lot of weight behind it, and that could keep driving the asset higher.”

That sentiment is reflected by traders on the event contract market, Kalshi, where 60 per cent of users are betting on Bitcoin reaching a $100,000 price tag before the year is out. Mike Colonnese, analyst at H.C Wainwright told CNBC:

“Strong positive sentiment is likely to persist through the balance of 2024 and [we] see bitcoin prices potentially reaching the six-figure mark by the end of this year,”

Analysts eyeing Lockheed Martin  

Some analysts have their eyes on the defence contractor, Lockheed Martin, which they expect to make gains under the Trump presidency. While Trump has pledged to work to wind down the conflicts in Ukraine and the Middle East – and to resist US involvement elsewhere, the President-Elect has also set out plans to boost the US military and its capabilities.

In his first term as President, Donald Trump created a new branch of the US Armed Forces, the Space Force, and in his second he pledged to construct a missile defence shield to protect the country against ICBMs and other long-range missiles. This would constitute an enormous expenditure which could push US military spending beyond the projected 10 per cent rise between 2028 and 2032.

Although there is a degree of uncertainty around Trump’s exact plans for the DOD, his election platform pledged that he would “invest in cutting-edge research and advanced technologies, including an Iron Dome Missile Defence Shield, support our troops with higher pay.”

While some analysts think Lockheed Martin could be a winner, others think that until the smoke clears and Trump takes office, its future remains less certain. As per The Guardian:

“For the big US defence companies such as Lockheed Martin, RTX and Northrup Grumman, Trump’s pledge to “strengthen and modernise” the military with US kit could mean increased orders. On the other hand, his pledge to “stop wars” could imply a smaller military in the future – if he follows through.”

However, those who think Lockheed stands to gain will point to the historical relationship between Republican presidents taking office and defence contractors reaping the rewards. And some have suggested as a donor to the Trump campaign, Lockheed Martin could be first in line as the newly elected president looks to reward his friends – and punish his enemies. As Yahoo News reported:

“Lockheed is one of America’s most well-respected defense contractors and its $133 billion market cap proves it. Bank of America analysts recently said that a GOP-controlled Congress and White House is a “best-case scenario” for this company. Now that this has come to pass, Lockheed is primed to grow even larger. Unfortunately for value hunters, Lockheed shares are trading at $565.94, but it does pay a 2.31 per cent dividend.”

Oil and gas could be a big winner

On the campaign trail, Trump repeatedly pledged that his administration would ‘drill baby drill.’ The President-Elect is expected to approve new pipelines, issue fresh permits for fracking and reduce the regulatory burden on companies looking to extract fossil fuels. Many analysts think US energy companies stand to benefit.

The editor of TheArmchairTrader, Stuart Fieldhouse, has named Exxon Mobil Corp, ConocoPhillips, Peabody Energy Corp and Nucor Corp as companies expected to do well under a second Trump term. In a November 6 article, he wrote:

“The largest names should continue to do well as analysts see not only demand continuing but these companies able to become more efficient in what they do. The other, mostly overlooked sector that may benefit is coal producers, as US manufacturing is expected to increase.”

Dan Coastsworth, investment analyst at AJ Bell, said that although Chevron and Exxon were up on Trump’s win, a sudden rush of fresh supply could drive down the oil price, and could potentially disincentivise extraction. Speaking with the IFA Magazine he said;

“Trump loves using the slogan ‘Drill, baby, drill’ and his election win has given a spark to US oil producers on the stock market. Trump has talked about increased drilling on federal land and awarding more permits for LNG exports. Chevron and ExxonMobil were among the stocks rising as their industry backdrop should benefit from looser regulation, although any big uptick in output could cap progress for the oil price.”

A November 14 report by Barrons concluded Trump’s win was good for the oil industry (mostly) but also highlighted the balancing act over supply issues:

“The current mantra is not “drill, baby, drill” but “returns, baby, returns.” Capital discipline has restored investor confidence, and shale companies do not want to rock the boat. U.S. shale growth is slowing, and a well-supplied market is not clamouring for more output.”

Corporate America braced to benefit from Trump agenda

A second Trump presidency promises significant shifts across multiple sectors, creating both opportunities and challenges for investors. The President-Elect’s pro-business stance, commitment to deregulation, and emphasis on economic growth are expected to favour industries like defence, oil and gas, and certain tech-driven companies like Tesla, while potentially disadvantaging others such as renewable energy.

Tesla stands out as a potential winner, benefitting from both a reduction in competitive pressures and a favourable relationship between Elon Musk and the Trump administration. Similarly, Bitcoin and the broader cryptocurrency market appear poised for growth as Trump’s policies aim to elevate the U.S. as a global leader in digital assets. Meanwhile, defence contractors like Lockheed Martin could gain from increased military spending, though uncertainties around Trump’s broader geopolitical strategy could temper gains.

In the energy sector, oil and gas companies are likely to see a resurgence as Trump’s “drill, baby, drill” agenda gains momentum, though balancing increased production with market stability will be crucial. Investors should also watch for shifts in U.S. trade policies, particularly tariffs, which could influence sectors reliant on international supply chains. As with any administration, the ultimate impact of Trump’s presidency will depend on his ability to deliver on campaign promises and navigate the economic complexities of a rapidly evolving global landscape. While certain sectors seem primed to thrive, caution and diversification remain essential strategies for navigating this dynamic market environment.