As concern grows around the 2024 US presidential election and its impact on global stocks, new quantitative analysis has identified stocks that could see significant moves if Trump wins.
In a white paper released on Thursday, Sydney-based Plato Investment Management revealed that while three Australian stocks were in the top 10 stocks most likely to fall if Trump wins, no Australian stocks were in the top 10. potential winners.
The study – based on correlations between daily movements in the betting market and daily share price movements of the 10,000 largest companies in developed markets – named gold mining companies De Gray Mining, Mineral Resources Limited and St Barbara Limited as those likely to experience negative price movements during the year. in the event of Trump’s victory.
It is interesting to note that five of the ten companies named by Plato as the most “losers” belong to the gold sub-sector.
According to Dr. David Allen, portfolio manager of the Plato Global Alpha Fund, a Trump presidency, characterized by deregulation and tax cuts, could boost economic growth, “creating a headwind for gold, traditionally a safe haven.” “.
Additionally, also on the list are renewable energy companies including US-based NextEra Energy Partners and Canada-based Brookfield Renewable Corp.
“It’s also not surprising to see renewable energy companies on the list, given Trump’s well-known opposition to green energy,” Allen said.
Of those expected to benefit from a Trump victory, Plato revealed the list is made up entirely of U.S. stocks.
According to Allen, deeply cyclical U.S. energy companies, including Baker Hughes Company, Halliburton Company and Helix Energy, as well as regional banks like Western Alliance, should prosper by benefiting from reduced regulation and lower interest rates.
The 10 are rounded out by super companies like Nvidia.
“The inclusion of several semiconductor companies may seem surprising, given Trump’s mixed stance on Taiwan and possible trade restrictions. However, these companies have a high beta, which means they tend to outperform the market when the market rises,” Allen said.
“If Trump’s policies boost market sentiment, semiconductor stocks could see substantial gains provided he refrains from punitive trade restrictions.”
Reflecting on Plato’s research methods, Allen said that while there are various expert predictions and expert opinions on this topic, “these crystal ball observations can be seductive, but often miss the mark.”
“Instead of relying on experts, whose opinions are often tinged with red or blue, we have applied a more objective approach through the type of analysis we regularly perform as part of the Plato Global investment process Alpha Fund to avoid disproportionate losses,” he said. .
“Global betting markets continually synthesize all available information, including real-time poll data, and punters are financially incentivized to get it right. We believe this analysis provides one of the most explicit and unbiased measures of how stocks might react to a Trump or Harris victory.
