The victory of Donald Trump in the presidential elections in the USA caused sudden changes in the markets immediately after the announcement of the results. Stocks of prisons and detention centers, Tesla, banks soared, and bitcoin hit an all-time high. On the other hand, the losers are retail chains, toy manufacturers and green energy companies
As after his debut entry into the White House, Trump's the second mandate caused strong reactions to the market. This time, they are based on his performance in his first term and announcements from the current campaign, he writes The new economy.
The growth of the dollar was noticed, which strengthened on Wednesday compared to most other currencies, and so compared to the euro it strengthened by 1,81 percent.
During the campaign, Trump already emphasized protectionist policies, including the introduction of tariffs.
The results of the US presidential elections were one of the elements of "disruption" in markets around the world, and experts believe that certain elements of these changes will only be reflected in the long run.
"Banking stocks have seen strong growth in anticipation of less strict regulation and possibly higher interest rates in the long term due to the necessity of higher US borrowing," says Nenad Gujaničić, stock broker at Momentum Securities for the New Economy.
Also, Gujaničić explains that "the pressure on Chinese stocks will be constant because it is unlikely that there will be a certain confrontation between the two largest economies in the world."
On the other hand, looking at corporate shares, the jump in Trump Media & Technology group shares stands out - by as much as 10,43 percent, whose current value, compared to the beginning of this year, is 93,94 percent higher.
However, this corporation was not the only one to see growth.
Prisons and detention centers
Companies that operate private prisons and detention centers rose Wednesday on expectations that Trump would detain more migrants crossing the border illegally. That would represent a reversal from the Biden administration, which allowed migrants seeking asylum to work legally in the country while awaiting trial, according to CNN.
Shares of two private prison operators, GEO Group and CoreCivic, jumped 42 percent and 29 percent on Wednesday.
Tesla
Elon Musk could be rewarded for his multimillion-dollar donation to the Trump campaign through more favorable policies for companies he owns, including Tesla, SpaceX, X and artificial intelligence startup xAI.
Of those companies, only shares in Tesla are publicly traded. Shares of the electric vehicle maker jumped 15 percent on Wednesday, while rivals such as Rivian and Lucid fell.
Credit card companies and banks
Trump's victory is expected to result in lighter regulation of the banking sector. The Biden administration, in contrast, has pushed for stricter capital requirements to protect the nation's largest banks from collapsing in times of great stress.
Shares of JP Morgan Chase, the largest bank in the United States, jumped 11,5 percent on Wednesday.
At the same time, shares of Discover Financial Services rose nearly 20 percent on expectations that its proposed merger with Capital One, whose shares rose 15 percent, would go through without a hitch under Republican leadership. So far, financial regulators have blocked the proposed merger of the two companies. In general, the Trump administration is expected to be more favorable to mergers and acquisitions compared to the Biden administration, which tried to block many.
Crypto stocks
At campaign events, Trump presented himself as a cryptocurrency-supporting candidate. At the conference, Fr bitcoin over the summer, he promised to keep bitcoin that the government seizes from criminals, rather than auctioning it off, which is the current practice.
His win on Tuesday lifted the price of bitcoin to a new record high of over $76.000 and sent cryptocurrency-related stocks soaring. Among the biggest gainers on Wednesday was crypto exchange Coinbase, whose shares jumped 31 percent.
Falls were also recorded.
Wednesday did not bring good news for all companies.
Retail chains such as Five Below, Wayfair and Dollar General, as well as toy makers Mattel and Hasbro, were all down on Wednesday. These declines are likely due to fears of Trump's tariffs, which could mean the products they sell will become more expensive, given that many of them are made outside the US.
Shares of green energy companies posted some of the biggest declines of the day as Trump is expected to favor fossil fuel production over other, more environmentally friendly energy sources. Shares of solar companies Sunnova and Sunrun fell 52 percent and 30 percent on Wednesday. Trump is expected to rescind the tax cuts and other incentives that Biden proposed in the Inflation Reduction Act.
Sources: New Economy/CNN
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