The 3 Best Deals to Make If Trump Wins in November

Wall Street investors have begun adjusting their strategies in anticipation of potential changes to the economy and markets if former President Donald Trump returns to office. This phenomenon, known as the “Trump trade,” involves focusing on sectors that are likely to thrive, informally known as Trump victory stocks. These stocks are based on expectations that Trump’s proposed policies, including on trade and tariffs, would have a significant impact on the U.S. economy and various sectors.

The assassination attempt on Trump would have increased his chances of winning the election. Polymarket, a leading prediction market, saw an increase in Trump’s chances from 60% to 72%.

Meanwhile, President Joe Biden has withdrawn from the 2024 presidential race, ending his re-election campaign after a heated debate with Donald Trump that raised concerns about his ability to stay in power. The unexpected announcement, made less than four months before the election, dramatically changed the campaign.

Determined to serve out his term, Biden quickly endorsed Vice President Kamala Harris to challenge Trump, urging the Democratic Party to rally behind her. That support positions Harris as the front-runner for the nomination at the August convention in Chicago.

Sell ​​EUR/USD

Citi (NYSE:VS) Foreign exchange analysts point out that Trump’s focus on trade and relations with the European Union could limit the EUR/USD pair’s rise. European Union leaders are bracing for major transatlantic tensions on the trade front.

The central bank’s currency strategists also noted Mr. Trump’s recent comments on currency issues, in which he acknowledged the challenges posed by a strong dollar. Mr. Trump has repeatedly said he wants a weaker dollar to support American companies operating abroad.

Despite this, Citi strategists believe that a possible Trump victory in the presidential election is unlikely to weaken the US dollar. On the contrary, the firm believes that the dollar will eventually strengthen, with the euro seen as a good candidate for a long-term play.

Citi believes that the outcome of the November 5 US elections will be positive for the dollar. It expects this scenario to be fully reflected in the value of the dollar on the date of the elections.

Strategists have advised against early long trades on the USD, suggesting that market sentiment is still fluid and could change as the election draws closer and the Democratic candidate’s platform becomes clearer.

However, Citi recommends that investors consider long dollar positions later in the year, around August or September, when markets traditionally start to price in election results more meaningfully. Given tensions with the EU, investors should consider selling any gains in EUR/USD.

Buy gold

If Donald Trump were to become president again and impose significant tariffs on U.S. imports, Citi analysts said those tariffs would not take effect until at least 12 months after his inauguration on Jan. 20, 2025.

This is one of the main reasons why Citi maintains a bullish stance on precious metals for the next 6-12 months, regardless of the election outcome. With this in mind, Citi’s commodity strategists are overwhelmingly bullish on gold.

They predict gold will reach $2,700 to $3,000 per ounce and silver $38 per ounce. Investors willing to follow this advice should consider buying gold in the spot market in the event of a pullback.

More importantly, the anticipation of a potential escalation of the trade war could prompt investors to seek hedges against equity and currency risks, which would further support precious metals and gold amid global uncertainty. However, in the event of tariffs being adopted, gold should outperform the broader commodity indices.

Buy Energy Stocks

Energy stocks are likely to benefit from Trump’s moves. After the failed assassination attempt, stocks of banks, health care companies, prison operators and energy companies rose in response to the former president’s proposed moves, underscoring the importance of stocks tied to Trump’s victory.

Selective Energy Sector SPDR Fund (NYSEARCA:XLE), the benchmark ETF for gauging energy sector sentiment, is in the process of making a move that could push the price above the recent high of around $98.00. This suggests an upside potential of around 7% from current levels.

Financial markets are reacting to the possibility of loosening regulations and explicit support for oil companies and fossil fuel automakers, as outlined in Trump’s platform. This has boosted interest in sectors that align with Trump’s victory values. In other sectors, health insurers should benefit from a regulatory environment that could become more relaxed.

Overall, expectations are for U.S. stocks to rise as Trump is likely to push for lower taxes and reduced regulation to support the business community.

As of the date of publication, Shane Neagle did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.

As of the date of publication, the responsible editor did not hold (either directly or indirectly) any positions in the securities mentioned in this article.