Last night, after dinner, as I began to tackle the amount of work that was in front of me, I wrote an article about the stock market industries that would do well if Hillary Clinton were to win the election. I looked at the polls, and the data driven predictors and felt relatively comfortable that Hillary Clinton would win the election. Most of the indicators predicted >70% chance that Hillary would win. This number seemed high enough to me that I was willing to take the chance this article would still be useful in the moaring
But that didn’t happen. As we know, Donald Trump won.
But I was able to use that line of thinking to see how a Trump led United States would affect various companies
Let’s take a dive into some company’s that may or may not, be happy that Trump won
Apple's CEO Tim Cook may secretly be fist pumping in his office about how things turned out. Apple currently has, as recently as a couple of months ago, more than $181 billion dollars in cash held in other countries.
One of Donald Trump’s campaign promises was to decrease the level of tax rates on businesses in hopes of ensuring that companies would continue to do business in America. Currently tax rates are about 35% and many expect that number to decrease to 15%.
Apple sees itself now with about $36 billion more in its pockets. Investors will like that as well. That is assuming that Trump is able to get his plans approved.
Trump spent the majority of his campaign talking in rural cities to people with lower incomes. Often times, these were people who had lost their jobs in various manufacturing industries to other countries such as China and Mexico. These were people from the auto industry in Michigan, or the steel industry in Ohio.
Trump is promising to rip up the free trade deals in hopes of bringing jobs back to America.
You know who’s going to benefit from that? US Steel producers, and US Steel Corporation in particular. With no free trade deals, steel from China or other places is going to get a lot more expensive. Expect to see the stock increase in the coming months.
Just like Hillary, part of Trump’s vision to “Make America Great Again” revolved around the notion of spending huge sums of money to help fix the crumbling roads, bridges and airports throughout the country.
It takes about five seconds of being in New York’s LaGuardia Airport to realize the infrastructure is in desperate need of improvement. Trump’s infrastructure plan is something that most American’s can agree is a good idea. These important aspects of the economy help make it easier to do business and easier for people to spend their money
Win - Win am I right?
So who is going to benefit? Massive companies who have a history of securing juicy government contracts are the easy answer. Companies such as Vulcan Materials and Caterpillar are such companies that are eagerly awaiting the government to annouce their plans.
One thing Hillary was quite vocal about during her election campaign was that she believed that pharmaceutical companies were taking advantage of their customers by charging prices that were much too high for people who could not afford anything else. Many of these stocks have seen their stock prices take a beating and are poised to jump now that the menacing Hillary Clinton will no longer be in charge.
Donald Trump has made no such threat to these companies.
Who should you be looking at as an investor? Look for Gilead Sciences and Pfizer to do well. There specialized drugs have been under the eye of regulators in the government.
WIth support throughout the government, expect Obamacare to come to a roaring halt in the near future. Most republicans hate the idea, and the service provided to the people has been mediocre at best. If Trump decides to live up to his promise, then expect this motion to pass into law quite quickly and quite easily.
Say goodbye to Obamacare.
Up to 20 million people depend on Obamacare for their health insurance coverage. With Obamacare out of the picture, a vast majority of these people will be looking around for another source of insurance.
Queue the opening of the floodgates. Massive health care insurance companies such as Humana, Aetna and Cigna all provide some form or other of health insurance and are absolutely drooling at the possibility of adding more paying customers into their systems.
Many investors worried that a Trump presidency would be bad news for the financial markets. However, given Trump's relatively appropriate acceptance speech and a general consesus that he won't be able to do whatever he wants, the markets responded quite well. The markets were actually all up on Wednesday and had shaken off what many thought would be bad news for the stock market.
No one quite knows what to expect from Donald, but if he lives up to his promises, then expect the companies mentioned above to be the real winners.