With market analysts increasingly pricing in the likelihood of a Donald Trump victory in the US presidential election, investors are eyeing three specific sectors expected to benefit from his administration's policies.
Saturday’s shooting at former US President Donald Trump's election rally raises his odds of winning back the White House in November and betting on his victory will increase.
His likely potential return to the White House brings with it expectations of a hawkish trade policy, less regulation, looser climate change regulations, and the extension of corporate and personal tax cuts.
Of course, should he win, there will be clear winners and losers for investors.
There are three sectors poised to thrive under a new Trump administration.
1. Energy
Trump’s administration has historically prioritized energy independence and economic growth over environmental regulations.
His past actions, such as rolling back Obama-era climate policies and exiting the Paris Agreement, reflect a preference for less stringent environmental oversight.
Should Trump win the presidency again, a similar approach is expected, which would benefit the energy sector, particularly fossil fuels.
Looser regulations would likely lower operational costs for energy companies, particularly those in the coal, oil, and natural gas industries.
Also, a Trump White House could push for increased domestic energy production, boosting the profitability of companies involved in extraction, production, and distribution.
In addition, Trump’s focus on rebuilding America's infrastructure could lead to increased demand for energy, benefiting energy providers and related industries.”
2. Financial
Trump's administration has historically favored deregulation, aiming to reduce the regulatory burden on financial institutions.
With less stringent regulations, banks and financial institutions can expect reduced compliance costs and increased profit margins.
Deregulation could also facilitate increased lending activities, boosting the revenues of financial services companies.
The anticipation of a Republican victory has already started to boost market confidence in the financial sector, with investors expecting a more business-friendly environment.
3. Manufacturing
Trump’s flagship 'America First’ policy has emphasized the importance of domestic manufacturing and reducing dependence on foreign imports.
A return to this policy is likely to include tariffs on foreign goods and incentives for American companies to bring manufacturing back to the US.
Hawkish trade policies could protect domestic manufacturers from foreign competition, allowing them to increase their market share and profitability, combined with incentives for companies to repatriate manufacturing jobs could boost employment and production within the US, positively impacting the manufacturing sector.
Extension of corporate tax cuts would directly benefit manufacturers by reducing their tax liabilities and increasing available capital for investment and expansion.
Investors are already positioning themselves to capitalize on the expected policy shifts as markets begin to price in a Trump victory.
Moving in early now and working with an experienced advisor is likely to best position them to mitigate risks and seize the inevitable opportunities that will be presented in the race for the White House.
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London-born Nigel Green is founder and CEO of deVere Group. Following in his father’s footstep, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory organizations, doing business in 100 countries and with more than $12bn under advisement. It specializes global financial solutions to international, local mass affluent, and high-net-worth clients. In early 2017, it was announced that deVere would launch its own private bank. In addition, deVere also confirmed it has received its own investment banking license.