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Sectors of focus after the election: How Trump’s policies are changing financial industries.

The Trump Trade – Part 2: What Happens Now?

Stocks pause after big post-election move. But there are many interesting movements behind the general market action. New leaders begin to emerge while old leaders begin to fall behind.
Remember what we wrote last week about “Trading with Trump”? How did Wall Street investors start buying certain asset classes, sectors and stocks that the new Trump administration is likely to support? As you might expect, his election victory sparked an EPIC next move in these investments! So we want to revisit this trend and short-term trading action for MoneyShow’s Chart of the Week. This new chart shows the performance ofBitcoin, SPDR S&P Regional Banking ETF (KRE), Tesla Inc. (TSLA), Invesco DB US Dollar Index Bullish Fund (UUP) and United States Oil Fund (USO).

Bitcoin, KRE, TSLA, UUP, USO (1-Week % Change)


You can see that Bitcoin, regional bank stocks, and Tesla stock have all jumped over the past week. The dollar has also risen by quite a large amount (for a currency, of course) while crude oil prices have fallen. The main fundamental catalyst is the shift in policy priorities under the Trump administration. The president-elect has pledged to apply a lighter regulatory treatment to cryptocurrencies and crypto-related businesses. He also mentions creating a national Bitcoin reserve (similar to the Strategic Petroleum Reserve, which began storing oil in 1977). Investors also believe Trump will reduce restrictions and regulations that apply to traditional banks and financial firms. Tax reform and pro-growth policies could boost earnings and lead to lower loan losses, which is also a positive sign for bank stocks. And what is happening with Tesla? CEO Elon Musk and his super PAC spent more than $175 million to help Trump become president, and investors expect to see benefits in return. That could include fewer regulations on the company’s self-driving car technology. In addition, Musk’s other businesses, such as SpaceX, are likely to receive more federal contracts and funds.

As for the dollar, Trump’s penchant for tariffs has been a driving force behind its rise. Imposing tariffs on foreign trading partners could weaken their economies relative to America’s. It could also lead to inflation, which would prevent the Federal Reserve from cutting interest rates to the extent that was expected. Relative interest rates are a major driver of relative currency values. Finally, the slogan “Drill, baby, drill” has long been one of Trump’s rallying cries. Easier regulatory policy and opening up more federal lands to drilling will boost domestic oil producers and explorers. But it will also increase the global supply of oil, putting pressure on prices. Therefore, this also accounts for the change in the value of USO. As mentioned before, big economic trends are more important than politics when it comes to long-term market movements. But it is clear that traders are not worried about this for the time being. Which means you can make profits if you’re quick and understand what’s driving the assets you see on your screen!

The stock of an eyewear company that is building a solid foundation is worth a look
In February 2022, Durable Capital filed a Form 4 with the SEC, disclosing a significant purchase of shares of Warby Parker Inc. (WRBY) for $22 million. We now have an opportunity to join a new uptrend at significantly better levels than where insiders bought, notes Steve Strazza, director of research at All Star Charts. Warby Parker is an eyewear brand known for its trendy and affordable prescription glasses, contact lenses and sunglasses. Durable Capital owns 6.8 million shares, which is about a 7% stake. Those shares are worth about $140 million as of Monday’s closing price. The fund was founded in 2019 and has quickly built a strong reputation, with assets under management (AUM) estimated at around $7 billion. Durable Capital’s investment approach often targets innovative companies with high growth potential, particularly in the technology and consumer sectors.

The hedge fund started taking its position as soon as WRBY went public in 2021. In doing so, he paid a much higher price and incurred significant potential losses, as stocks tend to fall or move sideways since the IPO. But all that is beginning to change. This potential bottom forming could be disappointing as the stock should have time to repair existing damage before starting to reverse the trend to an uptrend. For this reason, we look for a clear and decisive break of these resistances before getting involved.

Promising small cap in rising market I see continued strength through the end of the year, led by small caps in December. This should be followed by a sideways movement/consolidation in the first half of next year as policy appointments from the Trump administration begin to take shape. Generac Holdings Inc. (GNRC) is one of the favorite small companies in this environment, says Tom Hayes, editor of Hedge Fund Tips. We expect renewed strength in the second half of next year as earnings growth is confirmed and policy concerns ease. Ultimately, pro-growth policies will confirm the ongoing theme of the Roaring 20s, driven by productivity gains and stage 2 of the Generative AI boom, as the productivity and profitability of regular companies will increase.

The hedge fund started taking its position as soon as WRBY went public in 2021. In doing so, he paid a much higher price and incurred significant potential losses, as stocks tend to fall or move sideways since the IPO. But all that is beginning to change. This potential bottom forming could be disappointing as the stock should have time to repair existing damage before starting to reverse the trend to an uptrend. For this reason, we look for a clear and decisive break of these resistances before getting involved.

Promising small cap in rising market I see continued strength through the end of the year, led by small caps in December. This should be followed by a sideways movement/consolidation in the first half of next year as policy appointments from the Trump administration begin to take shape. Generac Holdings Inc. (GNRC) is one of the favorite small companies in this environment, says Tom Hayes, editor of Hedge Fund Tips. We expect renewed strength in the second half of next year as earnings growth is confirmed and policy concerns ease. Ultimately, pro-growth policies will confirm the ongoing theme of the Roaring 20s, driven by productivity gains and stage 2 of the Generative AI boom, as the productivity and profitability of regular companies will increase.

The hedge fund started taking its position as soon as WRBY went public in 2021. In doing so, he paid a much higher price and incurred significant potential losses, as stocks tend to fall or move sideways since the IPO. But all that is beginning to change. This potential bottom forming could be disappointing as the stock should have time to repair existing damage before starting to reverse the trend to an uptrend. For this reason, we look for a clear and decisive break of these resistances before getting involved.

Promising small cap in rising market I see continued strength through the end of the year, led by small caps in December. This should be followed by a sideways movement/consolidation in the first half of next year as policy appointments from the Trump administration begin to take shape. Generac Holdings Inc. (GNRC) is one of the favorite small companies in this environment, says Tom Hayes, editor of Hedge Fund Tips. We expect renewed strength in the second half of next year as earnings growth is confirmed and policy concerns ease. Ultimately, pro-growth policies will confirm the ongoing theme of the Roaring 20s, driven by productivity gains and stage 2 of the Generative AI boom, as the productivity and profitability of regular companies will increase.

Meanwhile, debt margin levels are not yet extreme, supporting continued flows from Treasury bills and money markets to capital markets as FOMO continues. Additionally, 74% of major central banks are easing monetary policy now, compared to 9% in July 2023. As for the GNRC, it has risen by around 40% over the past three months. It is expected to cross $200 in the short term and continue higher over time. Generac has a 70% share of the home backup generator market. As hurricane activity increases and the load on the power grid increases, the demand rate for home generators will increase.

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