Trump’s stock-market loyalists are getting cold feet at the last minute
First Solar and other stocks that purportedly benefit from Democrats amassing political power are outperforming.
Most experts, like Nate Silver, have the US presidential election as too close to call. Traders in the stock market have been much more confident in the outcome, seemingly betting decisively on a Trump win.
In this game of chicken, those with “skin in the game” are blinking at the eleventh hour. Call Monday’s stock-market price action the “Harris trade” — or, more accurately, call it a “we’re-not-so-sure-it’s-Trump trade.”
A basket of stocks compiled by Goldman Sachs that would supposedly benefit from Democrat policy priorities is enjoying its biggest one-day outperformance of a similar basket related to Republican policy priorities since the session following the presidential debate between Trump and Harris.
The poster child for this theme is First Solar, which is included in the Democratic policy basket referenced above. There’s a substantive policy difference between the two candidates that has the potential to materially impact the operational performance of companies in the clean-energy space: Trump has said he would rescind all unspent funds under the Inflation Reduction Act if he wins, and Harris wouldn’t. The stock is up 5% today on the heels of a gain that large to end last week.
Traders wiping the slate clean(er) today likely decreases the potential volatility associated with a Harris win, and increases the scope for some market fireworks in the event Trump prevails.
